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Bounded memory and permanent reputations

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  • Monte, Daniel

Abstract

A recent result in repeated incomplete information games is that after an arbitrarily long history, any equilibrium of the continuation game must be an equilibrium of the complete information game. This result implies that reputation is a short-run phenomenon. We study a particular class of reputation games and show that bounded memory may lead to permanent reputations. In fact, for a particular range of parameters, a bounded memory player may never be able to learn anything at all.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Mathematical Economics.

Volume (Year): 49 (2013)
Issue (Month): 5 ()
Pages: 345-354

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Handle: RePEc:eee:mateco:v:49:y:2013:i:5:p:345-354

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Web page: http://www.elsevier.com/locate/jmateco

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Keywords: Bounded memory; Reputation games; Learning;

References

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Citations

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Cited by:
  1. Heski Bar-Isaac & Joyee Deb, 2012. "Reputation for a Servant of Two Masters," Working Papers, New York University, Leonard N. Stern School of Business, Department of Economics 12-08, New York University, Leonard N. Stern School of Business, Department of Economics.
  2. Daron Acemoglu & Alexander Wolitzky, 2012. "Cycles of Distrust: An Economic Model," Levine's Working Paper Archive 786969000000000502, David K. Levine.

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