IDEAS home Printed from https://ideas.repec.org/a/spr/joecth/v21y2003i2p635-651.html
   My bibliography  Save this article

Firm reputation with hidden information

Author

Listed:
  • Steven Tadelis

Abstract

An adverse selection model of firm reputation is developed in which short-lived clients purchase services from firms operated by overlapping generations of agents. A firm's only asset is its name, or reputation, and trade of names is not observed by clients. As a result, names are traded in all equilibria regardless of the economy's horizon The general equilibrium analysis links the value of a name to the market for services. This causes a non-monotonicity that precludes higher types from sorting themselves through the market for names, and leads to “sensible” dynamics: reputations, and name prices, increase after success and decrease after failure. Copyright Springer-Verlag Berlin Heidelberg 2003

Suggested Citation

  • Steven Tadelis, 2003. "Firm reputation with hidden information," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 21(2), pages 635-651, March.
  • Handle: RePEc:spr:joecth:v:21:y:2003:i:2:p:635-651 DOI: 10.1007/s00199-002-0257-z
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s00199-002-0257-z
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Arnold C. Harberger, 1962. "The Incidence of the Corporation Income Tax," Journal of Political Economy, University of Chicago Press, vol. 70, pages 215-215.
    2. Hall, Robert E, 1988. "Intertemporal Substitution in Consumption," Journal of Political Economy, University of Chicago Press, vol. 96(2), pages 339-357, April.
    3. Ballard, Charles L. & Fullerton, Don & Shoven, John B. & Whalley, John, 2009. "A General Equilibrium Model for Tax Policy Evaluation," National Bureau of Economic Research Books, University of Chicago Press, edition 0, number 9780226036335.
    4. Auerbach, Alan J., 1989. "The deadweight loss from `non-neutral' capital income taxation," Journal of Public Economics, Elsevier, pages 1-36.
    5. Christophe Chamley, 1983. "Entrepreneurial Abilities and Liabilities in a Model of Self-Selection," Bell Journal of Economics, The RAND Corporation, vol. 14(1), pages 70-80, Spring.
    6. Charles L. Ballard & Don Fullerton & John B. Shoven & John Whalley, 1985. "Introduction to "A General Equilibrium Model for Tax Policy Evaluation"," NBER Chapters,in: A General Equilibrium Model for Tax Policy Evaluation, pages 1-5 National Bureau of Economic Research, Inc.
    7. Gravelle, Jane G & Kotlikoff, Laurence J, 1989. "The Incidence and Efficiency Costs of Corporate Taxation When Corporate and Noncorporate Firms Produce the Same Good," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 749-780, August.
    8. Harberger, Arnold C & Bruce, Neil, 1976. "The Incidence and Efficiency Effects of Taxes on Income from Capital: A Reply," Journal of Political Economy, University of Chicago Press, vol. 84(6), pages 1285-1292, December.
    9. Auerbach, Alan J., 1989. "The deadweight loss from `non-neutral' capital income taxation," Journal of Public Economics, Elsevier, pages 1-36.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wiseman, Thomas, 2008. "Reputation and impermanent types," Games and Economic Behavior, Elsevier, vol. 62(1), pages 190-210, January.
    2. Steven Tadelis, 1999. "What's in a Name? Reputation as a Tradeable Asset," American Economic Review, American Economic Association, pages 548-563.
    3. Hakenes, Hendrik & Peitz, Martin, 2004. "Selling reputation when going out of business," Papers 04-52, Sonderforschungsbreich 504.
    4. Joyee Deb, 2012. "Observability and Sorting in a Market for Names," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 21(2), pages 301-338, June.
    5. Olivier Gergaud & Florine Livat, 2004. "Team versus individual reputations : a model of interaction and some empirical evidence," Cahiers de la Maison des Sciences Economiques bla04015, Université Panthéon-Sorbonne (Paris 1).
    6. Prat, Nicolas & Madnick, Stuart E., 2008. "Measuring Data Believability: A Provenance Approach," Working papers 40086, Massachusetts Institute of Technology (MIT), Sloan School of Management.
    7. Milgrom, Paul & Roberts, John, 1996. "The LeChatelier Principle," American Economic Review, American Economic Association, pages 173-179.
    8. repec:eee:touman:v:38:y:2013:i:c:p:43-54 is not listed on IDEAS
    9. Wang, T, 2007. "The Reputation of an Organization and its Dynamics," Economics Discussion Papers 2954, University of Essex, Department of Economics.
    10. Christopher Chambers & Paul Healy, 2012. "Updating toward the signal," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 50(3), pages 765-786, August.

    More about this item

    Keywords

    JEL Classification Numbers: D80; L14.; Keywords and Phrases: Reputation as an asset; Trade of names; Overlapping generations.;

    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:joecth:v:21:y:2003:i:2:p:635-651. 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: (Sonal Shukla) or (Rebekah McClure). General contact details of provider: http://www.springer.com .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.