Title: Information value and externalities in reputation building
Abstract: Abstract In sequential equilibrium theory, reputation building is independent of whether the reputation builder is matched with one long-run partner or a series of short-run “strangers”. 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 more predictable than implied by equilibrium, and so reputation information has more economic value than implied by equilibrium. For short-run players, this reputation information value is an externality. For long-run players, the value of the information is internalized and so they have greater incentive to challenge the reputation builder.
Publication Year: 2010
Publication Date: 2010-04-26
Language: en
Type: article
Indexed In: ['crossref']
Access and Citation
Cited By Count: 16
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