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Share the Fame or Share the Blame? The Reputational Implications of Partnerships

Author

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  • Luís Almeida Costa
  • Luís Vasconcelos

Abstract

"We use an adverse selection model to study the dynamics of firms' reputations when firms implement joint projects. We show that in the case of joint projects a firm's reputation does not necessarily increase following a success and does not necessarily decrease following a failure. We also study how reputation considerations affect firms' decisions to participate in joint projects. We show that a high-reputation partner is not necessarily preferable to a low-reputation partner and, when implementation of the joint project by a single firm is possible, a high-quality partner may not be preferable to a low-quality partner." Copyright (c) 2010 Wiley Periodicals, Inc..

Suggested Citation

  • Luís Almeida Costa & Luís Vasconcelos, 2010. "Share the Fame or Share the Blame? The Reputational Implications of Partnerships," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 19(2), pages 259-301, June.
  • Handle: RePEc:bla:jemstr:v:19:y:2010:i:2:p:259-301
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    References listed on IDEAS

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    Cited by:

    1. Marc-Arthur Diaye & Nathalie Greenan & Sanja Pekovic, 2014. "Sharing the " Fame " of Quality Certification: Quality Supply Chain Effects Evidence
      [Partager la « réputation » de la certification qualité : l’identification d’un effet de chaîne d’appr
      ," Post-Print halshs-01362467, HAL.
    2. Enrico Sette, 2009. "Sorting, reputation and entry in a market for experts," Temi di discussione (Economic working papers) 727, Bank of Italy, Economic Research and International Relations Area.

    More about this item

    JEL classification:

    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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