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What's in a Name? Reputation as a Tradeable Asset

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Author Info
Steve Tadelis

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Abstract

August 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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Paper provided by Stanford University, Department of Economics in its series Working Papers with number 97033.

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Date of creation: 28 Aug 1997
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Handle: RePEc:wop:stanec:97033

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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.:
  1. Birger Wernerfelt, 1988. "Umbrella Branding as a Signal of New Product Quality: An Example of Signalling by Posting a Bond," RAND Journal of Economics, The RAND Corporation, vol. 19(3), pages 458-466, Autumn. [Downloadable!] (restricted)
  2. Kreps, David M. & Milgrom, Paul & Roberts, John & Wilson, Robert, 1982. "Rational cooperation in the finitely repeated prisoners' dilemma," Journal of Economic Theory, Elsevier, vol. 27(2), pages 245-252, August. [Downloadable!] (restricted)
  3. Douglas Gale & Robert W. Rosenthal, 1994. "Price and Quality Cycles for Experience Goods," RAND Journal of Economics, The RAND Corporation, vol. 25(4), pages 590-607, Winter. [Downloadable!] (restricted)
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  4. Maskin, Eric & Tirole, Jean, 1988. "A Theory of Dynamic Oligopoly, II: Price Competition, Kinked Demand Curves, and Edgeworth Cycles," Econometrica, Econometric Society, vol. 56(3), pages 571-99, May. [Downloadable!] (restricted)
  5. 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!]
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  6. repec:att:wimass:19199818 is not listed on IDEAS
  7. Diamond, Douglas W, 1989. "Reputation Acquisition in Debt Markets," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 828-62, August. [Downloadable!] (restricted)
  8. Klein, Benjamin & Leffler, Keith B, 1981. "The Role of Market Forces in Assuring Contractual Performance," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 615-41, August. [Downloadable!] (restricted)
  9. Akerlof, George A, 1970. "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, MIT Press, vol. 84(3), pages 488-500, August. [Downloadable!] (restricted)
  10. Holmstrom, Bengt, 1999. "Managerial Incentive Problems: A Dynamic Perspective," Review of Economic Studies, Blackwell Publishing, vol. 66(1), pages 169-82, January. [Downloadable!] (restricted)
  11. Bengt Holmstrom, 1999. "Managerial Incentive Problems: A Dynamic Perspective," NBER Working Papers 6875, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  12. Fudenberg, Drew & Maskin, Eric, 1986. "The Folk Theorem in Repeated Games with Discounting or with Incomplete Information," Econometrica, Econometric Society, vol. 54(3), pages 533-54, May. [Downloadable!] (restricted)
  13. Tirole, Jean, 1996. "A Theory of Collective Reputations (with Applications to the Persistence of Corruption and to Firm Quality)," Review of Economic Studies, Blackwell Publishing, vol. 63(1), pages 1-22, January. [Downloadable!] (restricted)
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  1. Costa, Luis Almeida e & Vasconcelos, Luis, 2008. "Share the Fame or Share the Blame? The Reputational Implications of Partnerships," FEUNL Working Paper Series wp539, Universidade Nova de Lisboa, Faculdade de Economia. [Downloadable!]
  2. Paul Belleflamme & Martin Peitz, 2009. "Asymmetric Information and Overinvestment in Quality," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  3. Joyee Deb, 2008. "Observability and Sorting in a Market for Names," Working Papers 08-25, New York University, Leonard N. Stern School of Business, Department of Economics. [Downloadable!]
  4. Avner Ben-Ner & Louis Putterman, . "Trust in the New Economy," Working Papers 1102, Industrial Relations Center, University of Minnesota (Twin Cities Campus). [Downloadable!]
  5. Heski Bar-Isaac, 2004. "Something to Prove: Reputation in teams and hiring to introduce uncertainty," Working Papers 04-07, New York University, Leonard N. Stern School of Business, Department of Economics. [Downloadable!]
  6. Bernardita Vial, 2008. "Competitive Equilibrium and Reputation under Imperfect Public Monitoring," Documentos de Trabajo 327, Instituto de Economía. Pontificia Universidad Católica de Chile.. [Downloadable!]
  7. Rudolf Kerschbamer & Muriel Niederle & Josef Perktold, 2000. "Market Institutions and Quality Enforcement," Econometric Society World Congress 2000 Contributed Papers 1482, Econometric Society. [Downloadable!]
  8. Oliver Hart, 2001. "Norms and the Theory of the Firm," NBER Working Papers 8286, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  9. Oliver Hart, 2001. "Norms and the Theory of the Firm," Harvard Institute of Economic Research Working Papers 1923, Harvard - Institute of Economic Research. [Downloadable!]
  10. Alan Morrison & William J. Wilhelm, Jr., 2003. "Partnership Firms, Reputation and Human Capital," OFRC Working Papers Series 2003fe02, Oxford Financial Research Centre. [Downloadable!]
  11. Alan D. Morrison & William J. Wilhelm, 2004. "Partnership Firms, Reputation, and Human Capital," American Economic Review, American Economic Association, vol. 94(5), pages 1682-1692, December. [Downloadable!]
  12. Luis Cabral & Ali Hortacsu, 2006. "The Dynamics of Seller Reputation: Evidence from eBay," Working Papers 06-32, New York University, Leonard N. Stern School of Business, Department of Economics. [Downloadable!]
  13. Luis Cabral & Ali Hortacsu, 2004. "The Dynamics of Seller Reputation: Theory and Evidence from eBay," NBER Working Papers 10363, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  14. 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. [Downloadable!]
    Other versions:
    • 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)
  15. Heski Bar-Isaac, 2001. "Self-Confidence and Survival," STICERD - Theoretical Economics Paper Series 428, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE. [Downloadable!]
    Other versions:
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