IDEAS home Printed from https://ideas.repec.org/p/ioe/doctra/447.html
   My bibliography  Save this paper

Incentives and Reputation when Names can be Replaced: Valjean Reinvented as Monsieur Madeleine

Author

Listed:
  • Bernardita Vial
  • Felipe Zurita

Abstract

This article studies the effect of the possibility that firms change their names over their incentives for choosing high quality. A firm may want to start over under a new name in order to avoid market punishment, if the reputation carried by its former name is too low. We find that that the effect of the name-changing option on incentives is ambiguous. Although the ability of avoiding punishment generally hurts incentives, it may sometimes improve them. Moreover, doing so may be the only way out a low-effort trap. The conditions under which each case obtains are explored.

Suggested Citation

  • Bernardita Vial & Felipe Zurita, 2013. "Incentives and Reputation when Names can be Replaced: Valjean Reinvented as Monsieur Madeleine," Documentos de Trabajo 447, Instituto de Economia. Pontificia Universidad Católica de Chile..
    • Handle: RePEc:ioe:doctra:447
    as

    Download full text from publisher

    File URL: https://www.economia.uc.cl/docs/doctra/dt-447.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. 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.
    2. Liu, Qingmin & Skrzypacz, Andrzej, 2009. "Limited Records and Reputation," Research Papers 2030, Stanford University, Graduate School of Business.
    3. George J. Mailath & Larry Samuelson, 2001. "Who Wants a Good Reputation?," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 68(2), pages 415-441.
    4. Luis M.B. Cabral, 2000. "Stretching Firm and Brand Reputation," RAND Journal of Economics, The RAND Corporation, vol. 31(4), pages 658-673, Winter.
    5. Bernardita Vial & Felipe Zurita, 2013. "Reputation-Driven Industry Dynamics," Documentos de Trabajo 436, Instituto de Economia. Pontificia Universidad Católica de Chile..
    6. Ginger Zhe Jin & Andrew Kato, 2006. "Price, quality, and reputation: evidence from an online field experiment," RAND Journal of Economics, RAND Corporation, vol. 37(4), pages 983-1005, December.
    7. Qingmin Liu, 2011. "Information Acquisition and Reputation Dynamics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 78(4), pages 1400-1425.
    8. Andrew Atkeson & Christian Hellwig & Guillermo Ordoñez, 2015. "Optimal Regulation in the Presence of Reputation Concerns," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 130(1), pages 415-464.
    9. Ekmekci, Mehmet, 2011. "Sustainable reputations with rating systems," Journal of Economic Theory, Elsevier, vol. 146(2), pages 479-503, March.
    10. Bar-Isaac, Heski & Tadelis, Steven, 2008. "Seller Reputation," Foundations and Trends(R) in Microeconomics, now publishers, vol. 4(4), pages 273-351, August.
    11. Heski Bar-Isaac, 2003. "Reputation and Survival: Learning in a Dynamic Signalling Model," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(2), pages 231-251.
    12. Ryan C. McDevitt, 2011. "Names and Reputations: An Empirical Analysis," American Economic Journal: Microeconomics, American Economic Association, vol. 3(3), pages 193-209, August.
    13. Vial Bernardita, 2010. "Walrasian Equilibrium and Reputation under Imperfect Public Monitoring," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 10(1), pages 1-44, May.
    14. Luís Cabral & Ali Hortaçsu, 2010. "The Dynamics Of Seller Reputation: Evidence From Ebay," Journal of Industrial Economics, Wiley Blackwell, vol. 58(1), pages 54-78, March.
    15. Ginger Zhe Jin & Andrew Kato, 2006. "Price, quality, and reputation: evidence from an online field experiment," RAND Journal of Economics, The RAND Corporation, vol. 37(4), pages 983-1005, December.
    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. Bernardita Vial & Felipe Zurita, 2017. "Entrants' Reputation And Industry Dynamics," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 58(2), pages 529-559, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bernardita Vial & Felipe Zurita, 2013. "Reputation-Driven Industry Dynamics," Documentos de Trabajo 436, Instituto de Economia. Pontificia Universidad Católica de Chile..
    2. Jolivet, Grégory & Jullien, Bruno & Postel-Vinay, Fabien, 2016. "Reputation and prices on the e-market: Evidence from a major French platform," International Journal of Industrial Organization, Elsevier, vol. 45(C), pages 59-75.
    3. Bruno Jullien & In-Uck Park, 2009. "Seller Reputation and Trust in Pre-Trade Communication," Levine's Working Paper Archive 814577000000000330, David K. Levine.
    4. Liu, Qingmin & Skrzypacz, Andrzej, 2014. "Limited records and reputation bubbles," Journal of Economic Theory, Elsevier, vol. 151(C), pages 2-29.
    5. Bruno Jullien & In-Uck Park, 2014. "New, Like New, or Very Good? Reputation and Credibility," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(4), pages 1543-1574.
    6. Alcalde, Pilar & Vial, Bernardita, 2016. "Willingness to Pay for Firm Reputation: Paying for Risk Rating in the Annuity Market," MPRA Paper 68993, University Library of Munich, Germany.
    7. Aperjis, Christina & Zeckhauser, Richard J. & Miao, Yali, 2014. "Variable temptations and black mark reputations," Games and Economic Behavior, Elsevier, vol. 87(C), pages 70-90.
    8. Behnud Mir Djawadi & René Fahr & Claus-Jochen Haake & Sonja Recker, 2018. "Maintaining vs. milking good reputation when customer feedback is inaccurate," PLOS ONE, Public Library of Science, vol. 13(11), pages 1-23, November.
    9. Heski Bar-Isaac & Joyee Deb, 2012. "Reputation for a Servant of Two Masters," Working Papers 12-08, New York University, Leonard N. Stern School of Business, Department of Economics.
    10. Bernardita Vial & Felipe Zurita, 2017. "Entrants' Reputation And Industry Dynamics," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 58(2), pages 529-559, May.
    11. Grégory Jolivet & Bruno Jullien & Fabien Postel-Vinay, 2014. "Reputation and Pricing on the e-Market: Evidence from a Major French Platform," SciencePo Working papers Main hal-03460312, HAL.
    12. Harry Pei, 2020. "Reputation Building under Observational Learning," Papers 2006.08068, arXiv.org, revised Nov 2020.
    13. Jie Bai, 2016. "Melons as Lemons: Asymmetric Information, Consumer Learning and Seller Reputation," Natural Field Experiments 00540, The Field Experiments Website.
    14. Schumacher, Heiner, 2014. "Incentives through consumer learning about tastes," International Journal of Industrial Organization, Elsevier, vol. 37(C), pages 170-177.
    15. Alp E. Atakan & Mehmet Ekmekci, 2012. "Reputation in Long-Run Relationships," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(2), pages 451-480.
    16. Andrew Mell, 2011. "Re-Thinking Reputation," Economics Series Working Papers 565, University of Oxford, Department of Economics.
    17. Luís Cabral & Ali Hortacsu, 2004. "The Dynamics of Seller Reputation: Theory and Evidence from eBay," Working Papers 04-05, New York University, Leonard N. Stern School of Business, Department of Economics.
    18. Hortacsu, Ali, 2005. "Trust and Reputation on eBay: Micro and Macro Perspectives," Department of Economics, Working Paper Series qt8vj7d50q, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    19. Gary Bolton & Ben Greiner & Axel Ockenfels, 2013. "Engineering Trust: Reciprocity in the Production of Reputation Information," Management Science, INFORMS, vol. 59(2), pages 265-285, January.
    20. Ekmekci, Mehmet, 2011. "Sustainable reputations with rating systems," Journal of Economic Theory, Elsevier, vol. 146(2), pages 479-503, March.

    More about this item

    Keywords

    Reputation; forgiveness; incentives;
    All these keywords.

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:ioe:doctra:447. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jaime Casassus (email available below). General contact details of provider: https://edirc.repec.org/data/iepuccl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.