What's in a Name? Reputation as a Tradeable Asset
AbstractAugust 28, 1997 A firm's reputation is considered an important asset. I develop a model in which a firm's only asset is its name -- which is associated with its reputation -- and study the economic forces which cause names to be valuable, tradeable assets. A simple adverse selection model together with an assumption on the non-observability of shifts of ownership guarantees that in equilibrium the market for names is active. This result is robust to both finite and infinite horizons, in contrast to standard results in the reputation literature. I also show that situations in which only good types buy names with a good reputation cannot be sustained in equilibrium.
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Bibliographic InfoPaper provided by Stanford University, Department of Economics in its series Working Papers with number 97033.
Date of creation: 28 Aug 1997
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Other versions of this item:
- L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
- M21 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics - - - Business Economics
- M31 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Marketing
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