The Dynamics of Collective Reputation
I present a stochastic version of Tirole's (1996) collective reputation model. In equilibrium, group behavior is persistent due to complementarity between the current incentives of group members and the group's reputation, which depends on its history. A group can maintain a strong reputation even as conditions become unfavorable, but an improvement in the environment may not help a group with a poor reputation. I also connect the model to the theory of statistical discrimination and show that the same mechanism can explain why discrimination might persist over time.
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Volume (Year): 9 (2009)
Issue (Month): 1 (August)
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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.:
- Tirole, Jean, 1996.
"A Theory of Collective Reputations (with Applications to the Persistence of Corruption and to Firm Quality),"
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- Tirole, Jean, 1994. ""A Theory of Collective Reputations" with Applications to the Persistence of Corruption and to Firm Quality," IDEI Working Papers 38, Institut d'Économie Industrielle (IDEI), Toulouse.
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- Moro, Andrea & Norman, Peter, 2004.
"A general equilibrium model of statistical discrimination,"
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Elsevier, vol. 114(1), pages 1-30, January.
- Moro,A. & Norman,P., 2001. "A general equilibrium model of statistical discrimination," Working papers 4, Wisconsin Madison - Social Systems.
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"Fast Equilibrium Selection by Rational Players Living in a Changing World,"
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11923, Iowa State University, Department of Economics.
- Burdzy, Krzysztof & Frankel, David M & Pauzner, Ady, 2001. "Fast Equilibrium Selection by Rational Players Living in a Changing World," Econometrica, Econometric Society, vol. 69(1), pages 163-89, January.
- Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-61, September.
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