In centralized mechanisms and platforms, participants do not fully observe each others' type reports. Hence, if there is a deviation from the promised mechanism, participants may be unable to detect it. We formalize a notion of auditabilty that captures how easy or hard it is to detect...

We analyze a theoretical model in which entrepreneurs’ property rights are threatened by “raiders” who can challenge them to a contest for control of their firms. Entrepreneurs have heterogeneous productivity, and decide how much capital to invest before raiders decide whom to attack. In...