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Reputation in the Simultaneous Play of Multiple Opponents

Author

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  • Drew Fudenberg
  • David M. Kreps

Abstract

Imagine that one player, the "incumbent" competes with several "entrants". Each entrant competes only with the incumbent, but observes play in all contests. Previous work shows that, as more and more entrants are added, the incumbent's reputation may dominate play of the game, if the entrants are faced in sequence. We identify conditions under which similar results obtain when the entrants are faced simultaneously, and we find specifications in which adding more simultaneous entrants has a dramatically different effect. We also show that, with either sequential or simultaneous play, incumbents need not prefer the situation in which their reputations can and do dominate play to the "informationally isolated" case in which each entrant observes only play in its own contest.

Suggested Citation

  • Drew Fudenberg & David M. Kreps, 1987. "Reputation in the Simultaneous Play of Multiple Opponents," Review of Economic Studies, Oxford University Press, vol. 54(4), pages 541-568.
  • Handle: RePEc:oup:restud:v:54:y:1987:i:4:p:541-568.
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    File URL: http://hdl.handle.net/10.2307/2297482
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    References listed on IDEAS

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    Cited by:

    1. Roland Benabou and Jean Tirole, 2004. "Willpower and Personal Rules," Journal of Political Economy, University of Chicago Press, vol. 112(4), pages 848-886, August.
    2. Robert Inman, 2001. "Transfers and Bailouts: Institutions for Enforcing Local Fiscal Discipline," Constitutional Political Economy, Springer, vol. 12(2), pages 141-160, June.
    3. repec:wsi:wschap:9789812818478_0010 is not listed on IDEAS
    4. Klemperer, Paul, 2000. "Why every Economist should Learn some Auction Theory," CEPR Discussion Papers 2572, C.E.P.R. Discussion Papers.
    5. Hörner, Johannes & Lovo, Stefano & Tomala, Tristan, 2011. "Belief-free equilibria in games with incomplete information: Characterization and existence," Journal of Economic Theory, Elsevier, vol. 146(5), pages 1770-1795, September.
    6. Yang, Bill Z., 1996. "Learning, reputation and entry deterrence: A chain-store game with correlated entrants," International Journal of Industrial Organization, Elsevier, vol. 14(5), pages 561-573, July.
    7. Paul Klemperer & Jeremy Bulow, 1999. "The Generalized War of Attrition," American Economic Review, American Economic Association, vol. 89(1), pages 175-189, March.
    8. John Kennes & Aaron Schiff, 2003. "The Value of a Reputation System," Industrial Organization 0301011, EconWPA.
    9. Ely, Jeffrey & Fudenberg, Drew & Levine, David K., 2008. "When is reputation bad?," Games and Economic Behavior, Elsevier, vol. 63(2), pages 498-526, July.
    10. Johannes Hörner, 2002. "Reputation and Competition," American Economic Review, American Economic Association, vol. 92(3), pages 644-663, June.
    11. Armando Gomes, "undated". "Going Public with Asymmetric Information, Agency Costs and Dynamic Trading," Rodney L. White Center for Financial Research Working Papers 09-97, Wharton School Rodney L. White Center for Financial Research.
    12. Yang, Bill Z., 1996. "Litigation, experimentation, and reputation," International Review of Law and Economics, Elsevier, vol. 16(4), pages 491-502, December.
    13. Spagnolo, Giancarlo, 1999. "Social relations and cooperation in organizations," Journal of Economic Behavior & Organization, Elsevier, vol. 38(1), pages 1-25, January.
    14. Michael Melles & Rainer Nitsche, 2016. "Multiple rounds in a chain store game," Theory and Decision, Springer, vol. 81(4), pages 571-579, November.
    15. Hall, George J. & Sargent, Thomas J., 2014. "Fiscal discriminations in three wars," Journal of Monetary Economics, Elsevier, vol. 61(C), pages 148-166.
    16. Elizabeth Brainerd & Nidhiya Menon, 2013. "Religion and Health in Early Childhood: Evidence from the Indian Subcontinent," Working Papers 65, Brandeis University, Department of Economics and International Businesss School.
    17. Dilip Abreu & David Pearce, 2003. "A Behavioral Model of Bargaining with Endogenous Types," Cowles Foundation Discussion Papers 1446, Cowles Foundation for Research in Economics, Yale University.
    18. CASTRO, Rui & COEN-PIRANI, Daniele, 2001. "On the Political Economy of Sequential Reforms," Cahiers de recherche 2001-21, Universite de Montreal, Departement de sciences economiques.
    19. John R. Conlon, 2005. "Seemingly Unrelated Repeated Games," Game Theory and Information 0511004, EconWPA.
    20. Melkonian, Tigran A., 1998. "Two essays on reputation effects in economic models," ISU General Staff Papers 1998010108000012873, Iowa State University, Department of Economics.
    21. Heski Bar-Isaac Jr. & Joyee Deb Jr., 2014. "(Good and Bad) Reputation for a Servant of Two Masters," American Economic Journal: Microeconomics, American Economic Association, vol. 6(4), pages 293-325, November.
    22. Harold L. Cole & Patrick J. Kehoe, 1991. "Reputation with multiple relationships: reviving reputation models of debt," Staff Report 137, Federal Reserve Bank of Minneapolis.

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