Related papers: Reputation Effects with Endogenous Records
Many online marketplaces enjoy great success. Buyers and sellers in successful markets carry out cooperative transactions even if they do not know each other in advance and a moral hazard exists. An indispensable component that enables…
We reverse-engineer the equilibrium construction process of asset prices in order to obtain returns which depend on firm characteristics, possibly in a linear fashion. One key requirement is that agents must have demands that rely…
When does reputation make experts play it safe, and what policy reverses that? I isolate a single lever - visibility of outcomes. In a two-page model with binary signals and outcomes, I show: (i) with an uninformative safe option and…
We present a model that investigates preference evolution with endogenous matching. In the short run, individuals' subjective preferences influence partner selection and behavior in strategic interactions, which affect their material…
We analyze reputation dynamics in an online market for illicit drugs using a novel dataset of prices and ratings. The market is a black market, and so contracts cannot be enforced. We study the role that reputation plays in alleviating…
In a unified framework we study equilibrium in the presence of an insider having information on the signal of the firm value, which is naturally connected to the fundamental price of the firm related asset. The fundamental value itself is…
I introduce a dynamic model of learning and random meetings between a long-lived agent with unknown ability and heterogeneous projects with observable qualities. The outcomes of the agent's matches with the projects determine her posterior…
This paper studies the value of a firm's internal information when the firm faces an adverse selection problem arising from unobservable managerial abilities. While more precise information allows the firm to make ex post more efficient…
In many two-sided markets, the parties to be matched have incomplete information about their characteristics. We consider the settings where the parties engaged are extremely patient and are interested in long-term partnerships. Hence, once…
We examine the implications of consumer privacy when preferences today depend upon past consumption choices, and consumers shop from different sellers in each period. Although consumers are ex ante identical, their initial consumption…
Indirect reciprocity is a reputation-based mechanism for cooperation in social dilemma situations when individuals do not repeatedly meet. The conditions under which cooperation based on indirect reciprocity occurs have been examined in…
Reputation is generally defined as the opinion of a group on an aspect of a thing. This paper presents a reputation model that follows a probabilistic modelling of opinions based on three main concepts: (1) the value of an opinion decays…
We theorize the financial health of a company and the risk of its default. A company is financially healthy as long as its equilibrium in the financial system is maintained, which depends on the cost attributable to the probability that…
We study the economic interactions among sellers and buyers in online markets. In such markets, buyers have limited information about the product quality, but can observe the sellers' reputations which depend on their past transaction…
Evaluation relationships are pivotal for maintaining a cooperative society. A formation of the evaluation relationships has been discussed in terms of indirect reciprocity, by modeling dynamics of good or bad reputations among individuals.…
We study reputation formation where a long-run player repeatedly observes private signals and takes actions. Short-run players observe the long-run player's past actions but not her past signals. The long-run player can thus develop a…
A seller sells an object over time but is uncertain how the buyer learns their willingness-to-pay. We consider informational robustness under \textit{limited commitment}, where the seller offers a price \textit{each period} to maximize…
Before purchase, a buyer of an experience good learns about the product's fit using various information sources, including some of which the seller may be unaware of. The buyer, however, can conclusively learn the fit only after purchasing…
As a firm varies the price of a product, consumers exhibit reference effects, making purchase decisions based not only on the prevailing price but also the product's price history. We consider the problem of learning such behavioral…
We examine an economy in which interactions are more productive if agents can trust others to refrain from cheating. Some agents are scoundrels, who cheat at every opportunity, while others cheat only if the cost of cheating, a decreasing…