Baliga, Sandeep; Sjöström, Tomas - In: American Economic Journal: Microeconomics 1 (2009) 1, pp. 75-100
In bilateral holdup and moral hazard in teams models, introducing a third party allows implementation of the first best, even if renegotiation is possible. Fines paid to the third party provide incentives for truth-telling and investment. This result holds even if the third party is corruptible,...
