Bad reputation

Jeffrey C. Ely, Juuso Välimäki

Research output: Contribution to journalReview articlepeer-review

136 Scopus citations

Abstract

We construct a model where the reputational concern of the long-run player to look good in the current period results in the loss of all surplus. This is in contrast to the bulk of the literature on reputations where such considerations mitigate myopic incentive problems. We also show that in models where all parties have long-run objectives, such losses can be avoided.

Original languageEnglish (US)
Pages (from-to)785-814
Number of pages30
JournalQuarterly Journal of Economics
Volume118
Issue number3
DOIs
StatePublished - Aug 2003

Funding

* This paper has previously been peer reviewed in NAJ Economics. See http://dlevine.econ.ucla.edu/v4.htm. We thank Gregory Pavlov for invaluable research assistance. We received helpful comments from Drew Fudenberg, David Levine, Thomas Mariotti, Stephen Morris, Michele Piccione, Tom Wiseman, the editor, and three anonymous referees. Ely gratefully acknowledges financial support from NSF grant #9985462.

ASJC Scopus subject areas

  • Economics and Econometrics

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