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Dynamic Delegation with Reputation Feedback

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  • Georgy Lukyanov
  • Anna Vlasova

Abstract

We study dynamic delegation with reputation feedback: a long-lived expert advises a sequence of implementers whose effort responds to current reputation, altering outcome informativeness and belief updates. We solve for a recursive, belief-based equilibrium and show that advice is a reputation-dependent cutoff in the expert's signal. A diagnosticity condition - failures at least as informative as successes - implies reputational conservatism: the cutoff (weakly) rises with reputation. Comparative statics are transparent: greater private precision or a higher good-state prior lowers the cutoff, whereas patience (value curvature) raises it. Reputation is a submartingale under competent types and a supermartingale under less competent types; we separate boundary hitting into learning (news generated infinitely often) versus no-news absorption. A success-contingent bonus implements any target experimentation rate with a plug-in calibration in a Gaussian benchmark. The framework yields testable predictions and a measurement map for surgery (operate vs. conservative care).

Suggested Citation

  • Georgy Lukyanov & Anna Vlasova, 2025. "Dynamic Delegation with Reputation Feedback," Papers 2508.19676, arXiv.org, revised Aug 2025.
  • Handle: RePEc:arx:papers:2508.19676
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    References listed on IDEAS

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    1. Thomas, Caroline, 2019. "Experimentation with reputation concerns – Dynamic signalling with changing types," Journal of Economic Theory, Elsevier, vol. 179(C), pages 366-415.
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