Information Value and Externalities in Reputation Building - An Experimental Study
In sequential equilibrium theory, reputation building is independent of whether the reputation builder is matched with one long-run player or a series of short run players. We observe, however, that reputation builders are significantly more challenged by long-run players in both laboratory chain store and buyer-seller games. Reputation builder behavior is not as unpredictable as required by the mixed equilibrium strategies and so information about the reputation builder’s past behavior has more economic value than equilibrium predicts. This in turn creates more incentives for long-run players to challenge the reputation builder, because they internalize the information externalities from the continuation game.
|Date of creation:||04 Aug 2007|
|Date of revision:||01 Aug 2008|
|Contact details of provider:|| Postal: |
Phone: 0221 / 470 5607
Fax: 0221 / 470 5179
Web page: http://www.wiso.uni-koeln.de
More information through EDIRC
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.:
- Chamley, Christophe & Gale, Douglas, 1994.
"Information Revelation and Strategic Delay in a Model of Investment,"
Econometric Society, vol. 62(5), pages 1065-85, September.
- Gale, D. & Chamley, C., 1992. "Information Revelation and Strategic Delay in a Model of Investment," Papers 10, Boston University - Department of Economics.
- repec:att:wimass:9102 is not listed on IDEAS
- Fudenberg, Drew & Levine, David K, 1989.
"Reputation and Equilibrium Selection in Games with a Patient Player,"
Econometric Society, vol. 57(4), pages 759-78, July.
- Drew Fudenberg & David K. Levine, 1995. "Reputation and Equilibrium Selection in Games with a Patient Player," Levine's Working Paper Archive 103, David K. Levine.
- Drew Fudenberg & David Levine, 1987. "Reputation and Equilibrium Selection in Games With a Patient Player," Working papers 461, Massachusetts Institute of Technology (MIT), Department of Economics.
- D. Fudenberg & David K. Levine, 1989. "Reputation and Equilibrium Selection in Games with a Patient Player," Levine's Working Paper Archive 508, David K. Levine.
- Andreoni, James A & Miller, John H, 1993.
"Rational Cooperation in the Finitely Repeated Prisoner's Dilemma: Experimental Evidence,"
Royal Economic Society, vol. 103(418), pages 570-85, May.
- James Andreoni & John H Miller, 1997. "Rational Cooperation in the finitely repeated prisoner's dilemma: experimental evidence," Levine's Working Paper Archive 670, David K. Levine.
- Erev, Ido & Roth, Alvin E, 1998. "Predicting How People Play Games: Reinforcement Learning in Experimental Games with Unique, Mixed Strategy Equilibria," American Economic Review, American Economic Association, vol. 88(4), pages 848-81, September.
- Brandts, Jordi & Figueras, Neus, 2003.
"An exploration of reputation formation in experimental games,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 50(1), pages 89-115, January.
- Brandts, J. & Figueras, N., 1997. "An Exploration of Reputation Formation in Experimental Games," UFAE and IAE Working Papers 404.97, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Mark Walker & John Wooders, 2001. "Minimax Play at Wimbledon," American Economic Review, American Economic Association, vol. 91(5), pages 1521-1538, December.
- Shachat, Jason M., 2002. "Mixed Strategy Play and the Minimax Hypothesis," Journal of Economic Theory, Elsevier, vol. 104(1), pages 189-226, May.
- Drew Fudenberg & Jean Tirole, 1991. "Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061414, June.
- McKelvey, Richard D & Palfrey, Thomas R, 1992. "An Experimental Study of the Centipede Game," Econometrica, Econometric Society, vol. 60(4), pages 803-36, July.
- Camerer, Colin & Weigelt, Keith, 1988. "Experimental Tests of a Sequential Equilibrium Reputation Model," Econometrica, Econometric Society, vol. 56(1), pages 1-36, January.
When requesting a correction, please mention this item's handle: RePEc:kls:series:0035. 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: (Peter Werner)
If references are entirely missing, you can add them using this form.