Who Wants a Good Reputation?
We examine a market in which long-lived firms face a short-term incentive to exert low effort, but could earn higher profits if it were possible to commit to high effort. There are two types of firms, "inept" firms who can only exert low effort, and "competent" firms who have a choice between high and low effort. There is occasional exit, and competent and inept potential entrants compete for the right to inherit the departing firm's reputation. Consumers receive noisy signals of effort choice, and so competent firms choose high effort in an attempt to distinguish themselves from inept firms. A competent firm is most likely to enter the market by purchasing an average reputation, in the hopes of building it into a good reputation, than either a very low reputation or a very high reputation. Inept firms, in contrast, find it more profitable to either buy high reputations and deplete them or buy low reputations. Copyright 2001 by The Review of Economic Studies Limited
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Volume (Year): 68 (2001)
Issue (Month): 2 (April)
|Contact details of provider:|| Web page: http://www.blackwellpublishing.com/journal.asp?ref=0034-6527|
|Order Information:||Web: http://www.blackwellpublishing.com/subs.asp?ref=0034-6527|
References listed on IDEAS
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.:
- 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.
- George J. Mailath & Larry Samuelson, .
""Your Reputation Is Who You're Not, Not Who You'd Like To Be'',"
CARESS Working Papres
98-11, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
- 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.
- George J. Mailath & Larry Samuelson, . "Your Reputation Is Who You're Not, Not Who You'd Like To Be," Penn CARESS Working Papers bb1b279d6539c9ed3b83a027c, Penn Economics Department.
- Mailath,G.J. & Samuelson,L., 1998. "Your reputation is who you're not, not who you'd like to be," Working papers 18, Wisconsin Madison - Social Systems.
- Fudenberg, Drew & Levine, David I & Maskin, Eric, 1994.
"The Folk Theorem with Imperfect Public Information,"
Econometric Society, vol. 62(5), pages 997-1039, September.
- Fudenberg, D. & Levine, D.K. & Maskin, E., 1989. "The Folk Theorem With Inperfect Public Information," Working papers 523, Massachusetts Institute of Technology (MIT), Department of Economics.
- Drew Fudenberg & David K. Levine & Eric Maskin, 1994. "The Folk Theorem with Imperfect Public Information," Levine's Working Paper Archive 394, David K. Levine.
- Drew Fudenberg & David K. Levine & Eric Maskin, 1994. "The Folk Theorem with Imperfect Public Information," Levine's Working Paper Archive 2058, David K. Levine.
- Steven Tadelis, 1999.
"What's in a Name? Reputation as a Tradeable Asset,"
American Economic Review,
American Economic Association, vol. 89(3), pages 548-563, June.
- Aoyagi, Masaki, 1996. "Reputation and Entry Deterrence under Short-Run Ownership of a Firm," Journal of Economic Theory, Elsevier, vol. 69(2), pages 411-430, May.
When requesting a correction, please mention this item's handle: RePEc:bla:restud:v:68:y:2001:i:2:p:415-41. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.