When is Reputation Bad?

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When is Reputation Bad?

Author Info

Jeffrey Ely
Drew Fudenberg
David K. Levine

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Abstract

In traditional reputation theory, reputation is good for the long-run player. In “Bad Reputation,” Ely and Valimaki give an example in which reputation is unambiguously bad. This paper characterizes a more general class of games in which that insight holds, and presents some examples to illustrate when the bad reputation effect does and does not play a role. The key properties are that participation is optional for the short-run players, and that every action of the long-run player that makes the short-run players want to participate has a chance of being interpreted as a signal that the long-run player is “bad. ” We also broaden the set of commitment types, allowing many types, including the “Stackelberg type” used to prove positive results on reputation. Although reputation need not be bad if the probability of the Stackelberg type is too high, the relative probability of the Stackelberg type can be high when all commitment types are unlikely.

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Publisher Info
Paper provided by Harvard - Institute of Economic Research in its series Harvard Institute of Economic Research Working Papers with number 2035.

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Date of creation: 2004
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Handle: RePEc:fth:harver:2035

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Other versions of this item:

Article
- Ely, Jeffrey & Fudenberg, Drew & Levine, David K., 2008. "When is reputation bad?," Games and Economic Behavior, Elsevier, vol. 63(2), pages 498-526, July. [Downloadable!] (restricted)
Paper
- Jeffrey Ely & Drew Fudenberg & David K. Levine, 2002. "When is Reputation Bad?," Harvard Institute of Economic Research Working Papers 1962, Harvard - Institute of Economic Research. [Downloadable!]
- Jeffery Ely & Drew Fudenberg & David Levine, 2002. "When is Reputation Bad?," Discussion Papers 1358, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
- Jeffrey Ely & Drew Fudenberg & David K Levine, 2005. "When is Reputation Bad," Levine's Working Paper Archive 618897000000000016, David K. Levine. [Downloadable!]

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

George J. Mailath & Larry Samuelson, 1998. "Your Reputation Is Who You're Not, Not Who You'd Like To Be," CARESS Working Papres rep-is-sep, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences. [Downloadable!]
Other versions:
- George J. Mailath & Larry Samuelson, . ""Your Reputation Is Who You're Not, Not Who You'd Like To Be''," CARESS Working Papres 98-11, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
- George J. Mailath & Larry Samuelson, . "Your Reputation Is Who You're Not, Not Who You'd Like To Be," Penn CARESS Working Papers bb1b279d6539c9ed3b83a027c, Penn Economics Department. [Downloadable!]
Mailath, George J & Samuelson, Larry, 2001. "Who Wants a Good Reputation?," Review of Economic Studies, Blackwell Publishing, vol. 68(2), pages 415-41, April.
Other versions:
- George J. Mailath & Larry Samuelson, . ""Who Wants a Good Reputation?''," CARESS Working Papres 98-12, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
- George J. Mailath & Larry Samuelson, . "Who Wants a Good Reputation?," Penn CARESS Working Papers a3e3219aee004bd237f8112f9, Penn Economics Department. [Downloadable!]
- George J. Mailath & Larry Samuelson, 2000. "Who Wants a Good Reputation?," CARESS Working Papres sell-rep, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences. [Downloadable!]
Stephen Morris, 2001. "Political Correctness," Journal of Political Economy, University of Chicago Press, vol. 109(2), pages 231-265, April. [Downloadable!] (restricted)
Other versions:
- Stephen Morris, 1999. "Political Correctness," Cowles Foundation Discussion Papers 1242, Cowles Foundation, Yale University. [Downloadable!]
Celentani, Marco, et al, 1996. "Maintaining a Reputation against a Long-Lived Opponent," Econometrica, Econometric Society, vol. 64(3), pages 691-704, May. [Downloadable!] (restricted)
Other versions:
- Marco Celentani, 1993. "Maintaining a Reputation Against A Long-Lived Opponent," Discussion Papers 1075R, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
Fudenberg, Drew & Levine, David K, 1989. "Reputation and Equilibrium Selection in Games with a Patient Player," Econometrica, Econometric Society, vol. 57(4), pages 759-78, July. [Downloadable!] (restricted)
Other versions:
- Drew Fudenberg & David Levine, 1987. "Reputation and Equilibrium Selection in Games With a Patient Player," Working papers 461, Massachusetts Institute of Technology (MIT), Department of Economics.
- Drew Fudenberg & David K. Levine, 1995. "Reputation and Equilibrium Selection in Games with a Patient Player," Levine's Working Paper Archive 103, David K. Levine. [Downloadable!]
- D. Fudenberg & David K. Levine, 1989. "Reputation and Equilibrium Selection in Games with a Patient Player," Levine's Working Paper Archive 508, David K. Levine. [Downloadable!]
Jeffrey C. Ely & Juuso Välimäki, 2003. "Bad Reputation," The Quarterly Journal of Economics, MIT Press, vol. 118(3), pages 785-814, August. [Downloadable!] (restricted)
Other versions:
- Jeffrey C. Ely & Juuso Valimaki, 2002. "Bad Reputation," Discussion Papers 1348, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
- Jeffrey Ely & Jusso Valimaki, 2002. "Bad Reputation," NajEcon Working Paper Reviews 391749000000000514, www.najecon.org. [Downloadable!]
Kreps, David M. & Wilson, Robert, 1982. "Reputation and imperfect information," Journal of Economic Theory, Elsevier, vol. 27(2), pages 253-279, August. [Downloadable!] (restricted)
Other versions:
- David Kreps & Robert Wilson, 1999. "Reputation and Imperfect Information," Levine's Working Paper Archive 238, David K. Levine. [Downloadable!]
repec:att:wimass:19199818 is not listed on IDEAS
Drew Fudenberg & David K. Levine & Eric Maskin, 1994. "The Folk Theorem with Imperfect Public Information," Levine's Working Paper Archive 394, David K. Levine. [Downloadable!]
Other versions:
- Drew Fudenberg & David K. Levine & Eric Maskin, 1994. "The Folk Theorem with Imperfect Public Information," Levine's Working Paper Archive 2058, David K. Levine. [Downloadable!]
- Fudenberg, D. & Levine, D.K. & Maskin, E., 1989. "The Folk Theorem With Inperfect Public Information," Working papers 523, Massachusetts Institute of Technology (MIT), Department of Economics.
- Fudenberg, Drew & Levine, David I & Maskin, Eric, 1994. "The Folk Theorem with Imperfect Public Information," Econometrica, Econometric Society, vol. 62(5), pages 997-1039, September. [Downloadable!] (restricted)
Milgrom, Paul & Roberts, John, 1982. "Predation, reputation, and entry deterrence," Journal of Economic Theory, Elsevier, vol. 27(2), pages 280-312, August. [Downloadable!] (restricted)
Other versions:
- Paul Milgrom & John Roberts, 1997. "Predation, reputation , and entry deterrence," Levine's Working Paper Archive 1460, David K. Levine. [Downloadable!]
- Paul Milgrom & John Roberts, 1980. "Predation, Reputation, and Entry Deterrence," Discussion Papers 427, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
Marco Celentani & Drew Fudenberg & David K Levine & Wolfgang Pesendorfer, 2006. "Maintaining A Reputation Against A Patient Opponent," Levine's Working Paper Archive 699152000000000019, David K. Levine. [Downloadable!]
Other versions:
- Marco Celentani & Drew Fudenberg & David K. Levine & Wolfgang Pesendorfer, 1996. "Maintaining a Reputation against a Patient Opponent," Levine's Working Paper Archive 2015, David K. Levine. [Downloadable!]

Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Prat, Andrea, 2003. "The Wrong Kind of Transparency," CEPR Discussion Papers 3859, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Andrea Prat, 2002. "The Wrong Kind of Transparency," STICERD - Theoretical Economics Paper Series 439, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE. [Downloadable!]
Drew Fudenberg & David K Levine & Satoru Takahashi, 2004. "Perfect Public Equilibrium When Players are Patient," Levine's Working Paper Archive 618897000000000865, David K. Levine. [Downloadable!]
Other versions:
- Drew Fudenberg & David K. Levine & Satoru Takahashi, 2004. "Perfect Public Equilibrium When Players Are Patient," Harvard Institute of Economic Research Working Papers 2051, Harvard - Institute of Economic Research. [Downloadable!]
- Fudenberg, Drew & Levine, David K. & Takahashi, Satoru, 2007. "Perfect public equilibrium when players are patient," Games and Economic Behavior, Elsevier, vol. 61(1), pages 27-49, October. [Downloadable!] (restricted)
Matthew Gentzkow & Jesse Shapiro, 2005. "Media Bias and Reputation," NBER Working Papers 11664, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
- Matthew Gentzkow & Jesse M. Shapiro, 2006. "Media Bias and Reputation," Journal of Political Economy, University of Chicago Press, vol. 114(2), pages 280-316, April. [Downloadable!] (restricted)
Andrea Prat, 2005. "The Wrong Kind of Transparency," American Economic Review, American Economic Association, vol. 95(3), pages 862-877, June. [Downloadable!]

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