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When is Reputation Bad?

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  • Levine, David
  • Ely, Jeffrey
  • Fudenberg, Drew

Abstract

In traditional reputation models, the ability to build a reputation is good for the long-run player. In [Ely, J., Valimaki, J., 2003. Bad reputation. NAJ Econ. 4, 2; http://www.najecon.org/v4.htm. Quart. J. Econ. 118 (2003) 785–814], Ely and Valimaki give an example in which reputation is unambiguously bad. This paper characterizes a class of games in which that insight holds. The key to bad reputation is 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 allow a broad 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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Bibliographic Info

Paper provided by Harvard University Department of Economics in its series Scholarly Articles with number 3196337.

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Date of creation: 2008
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Publication status: Published in Games and Economic Behavior
Handle: RePEc:hrv:faseco:3196337

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  1. Stephen Morris, 1999. "Political Correctness," Cowles Foundation Discussion Papers, Cowles Foundation for Research in Economics, Yale University 1242, Cowles Foundation for Research in Economics, Yale University.
  2. Mailath, George J & Samuelson, Larry, 2001. "Who Wants a Good Reputation? Erratum," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 68(3), pages 714, July.
  3. Jeffrey Ely & Jusso Valimaki, 2002. "Bad Reputation," NajEcon Working Paper Reviews, www.najecon.org 391749000000000514, www.najecon.org.
  4. Marco Celentani & Drew Fudenberg & David K. Levine & Wolfgang Pesendorfer, 1996. "Maintaining a Reputation against a Patient Opponent," Levine's Working Paper Archive, David K. Levine 2015, David K. Levine.
  5. Mailath,G.J. & Samuelson,L., 1998. "Who wants a good reputation?," Working papers, Wisconsin Madison - Social Systems 19, Wisconsin Madison - Social Systems.
  6. Fudenberg, Drew & Kreps, David M & Maskin, Eric S, 1990. "Repeated Games with Long-run and Short-run Players," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 57(4), pages 555-73, October.
  7. Fudenberg Drew & Levine David K., 1994. "Efficiency and Observability with Long-Run and Short-Run Players," Journal of Economic Theory, Elsevier, Elsevier, vol. 62(1), pages 103-135, February.
  8. Drew Fudenberg & David Levine, 1987. "Reputation and Equilibrium Selection in Games With a Patient Player," Working papers, Massachusetts Institute of Technology (MIT), Department of Economics 461, Massachusetts Institute of Technology (MIT), Department of Economics.
  9. Fudenberg, D. & Levine, D.K. & Maskin, E., 1989. "The Folk Theorem With Inperfect Public Information," Working papers, Massachusetts Institute of Technology (MIT), Department of Economics 523, Massachusetts Institute of Technology (MIT), Department of Economics.
  10. George J. Mailath & Larry Samuelson, . "Your Reputation Is Who You're Not, Not Who You'd Like To Be," Penn CARESS Working Papers, Penn Economics Department bb1b279d6539c9ed3b83a027c, Penn Economics Department.
  11. Paul Milgrom & John Roberts, 1997. "Predation, reputation , and entry deterrence," Levine's Working Paper Archive, David K. Levine 1460, David K. Levine.
  12. Fudenberg, D., 1991. "Maintaining a Reputation when Strategies are Imperfectly Observed," Working papers, Massachusetts Institute of Technology (MIT), Department of Economics 589, Massachusetts Institute of Technology (MIT), Department of Economics.
  13. David Kreps & Robert Wilson, 1999. "Reputation and Imperfect Information," Levine's Working Paper Archive, David K. Levine 238, David K. Levine.
  14. Celentani, Marco, et al, 1996. "Maintaining a Reputation against a Long-Lived Opponent," Econometrica, Econometric Society, Econometric Society, vol. 64(3), pages 691-704, May.
  15. Fudenberg, Drew & Kreps, David M, 1987. "Reputation in the Simultaneous Play of Multiple Opponents," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 54(4), pages 541-68, October.
  16. Sorin, Sylvain, 1999. "Merging, Reputation, and Repeated Games with Incomplete Information," Games and Economic Behavior, Elsevier, Elsevier, vol. 29(1-2), pages 274-308, October.
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