Reputation in Long-Run Relationships
AbstractWe model a long-run relationship as an infinitely repeated game played by two equally patient agents. In each period, the agents play an extensive-form stage game of perfect information with either locally non-conflicting interests or strictly conflicting interests. There is incomplete information about the type of Player 1, while Player 2's type is commonly known. We show that a sufficiently patient Player 1 can leverage Player 2's uncertainty about his type to secure his highest pay-off, compatible with Player 2's individual rationality, in any perfect Bayesian equilibrium of the repeated game. Copyright 2012, Oxford University Press.
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Bibliographic InfoArticle provided by Oxford University Press in its journal The Review of Economic Studies.
Volume (Year): 79 (2012)
Issue (Month): 2 ()
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- Alp Atakan & Mehmet Ekmekci, 2009. "Reputation in Long-Run Relationships," Discussion Papers, Northwestern University, Center for Mathematical Studies in Economics and Management Science 1507, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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