We use an adverse selection model to study the dynamics of ?rms?reputations when ?rms implement joint projects. We show that in contrast with projects implemented by a single ?rm, in the case of joint projects a ?rm?s reputation does not necessarily increase following a success and does not necessarily decrease following a failure. We also study how reputation considerations a¤ect ?rms? decisions to participate in joint projects. We show that a high quality partner may not be preferable to a low quality partner, and that a high reputation partner is not necessarily preferable to a low reputation partner. JEL codes: L14, L15, L24, D82, D85
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Paper provided by Universidade Nova de Lisboa, Faculdade de Economia in its series FEUNL Working Paper Series with number
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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.
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Hendrik Hakenes & Martin Peitz, 2007.
"Observable Reputation Trading,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(2), pages 693-730, 05.
[Downloadable!] (restricted)
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Hendrik Hakenes & Martin Peitz, 2006.
"Observable Reputation Trading,"
Discussion Papers
131, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
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