Behavioral constraints on the design of subgame-perfect implementation mechanisms

Arbeitspapier

We study subgame-perfect implementation (SPI) mechanisms that have been proposed as a solution to incomplete contracting problems. We show that these mechanisms - which are based on off-equilibrium arbitration clauses that impose large fines for lying and the inappropriate use of arbitration - have severe behavioral constraints because the fines induce retaliation against legitimate uses of arbitration. Incorporating reciprocity preferences into the theory explains the observed behavioral patterns and helps us develop a new mechanism that is more robust and achieves high rates of truth-telling and efficiency. Our results highlight the importance of tailoring implementation mechanisms to the underlying behavioral environment.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Working Paper ; No. 171

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Organizational Behavior; Transaction Costs; Property Rights ; Social Choice; Clubs; Committees; Associations ; Economics of Contract: Theory ; Design of Experiments: Laboratory, Group Behavior
• Thema: Implementation Theory ; Incomplete Contracts ; Experiments

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Fehr, Ernst ; Powell, Michael ; Wilkening, Tom
• Ereignis: Veröffentlichung
• (wer): University of Zurich, Department of Economics
• (wo): Zurich
• (wann): 2020

Weitere Informationen

• DOI: doi:10.5167/uzh-98147
• Handle: http://hdl.handle.net/10419/227459
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ