Honest Equilibria in Reputation Games: The Role of Time Preferences

Kartal, Melis (2018) Honest Equilibria in Reputation Games: The Role of Time Preferences. American Economic Journal: Microeconomics, 10 (1). pp. 278-314. ISSN 1945-7669

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Abstract

New relationships are often plagued with uncertainty because one of the players has some private information about her "type". The reputation literature has shown that equilibria that reveal this private information typically involve breach of trust and conflict. But are these inevitable for equilibrium learning? I analyze self-enforcing relationships where one party is privately informed about her time preferences. I show that there always exist honest reputation equilibria, which fully reveal information and support cooperation without breach or conflict. I compare these to dishonest reputation equilibria from several perspectives. My results are applicable to a broad class of repeated games.

Item Type: Article
Classification Codes: JEL C73, D82, D83, D86, Z13
Divisions: Departments > Volkswirtschaft > Finanzwissenschaft u öffentl. Wirtschaft
Version of the Document: Published
Depositing User: Gertraud Novotny
Date Deposited: 19 Feb 2018 14:16
Last Modified: 29 Nov 2018 13:44
Related URLs:
FIDES Link: https://bach.wu.ac.at/d/research/results/85233/
URI: https://epub.wu.ac.at/id/eprint/6067

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