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Reputation and the “need for enemies”

Author

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  • Maxime Menuet

    (Université Clermont Auvergne)

  • Patrick Villieu

    (Université d’Orléans)

Abstract

A reputation of competence in solving a particular problem is useful only if the problem remains in the future. Hence, there is an incentive to keep the “enemy” alive: An agent may do wrong in his or her job precisely because he or she is competent. The paper develops this mechanism in a general career concerns framework and shows that a tradeoff between reputation and the need for enemies emerges. As a result, agents are induced to produce only moderate effort, and only moderately skilled agents are likely to be appointed. Implications of the analysis are discussed in a multitasking environment with incomplete transparency. Some evidence in principal–agent relationships and the political arena is presented to illustrate our theory.

Suggested Citation

  • Maxime Menuet & Patrick Villieu, 2021. "Reputation and the “need for enemies”," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 72(4), pages 1049-1089, November.
    • Handle: RePEc:spr:joecth:v:72:y:2021:i:4:d:10.1007_s00199-020-01289-7
    DOI: 10.1007/s00199-020-01289-7
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    Cited by:

    1. Maxime Menuet & Hugo Oriola & Patrick Villieu, 2021. "Do Conservative Central Bankers Weaken the Chances of Conservative Politicians?," Working Papers hal-03479411, HAL.

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    More about this item

    Keywords

    Political economy; Career concerns; Need for enemies; Transparency;
    All these keywords.

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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