Imperfect Monitoring and Impermanent Reputations

Imperfect Monitoring and Impermanent Reputations∗

We study the long-run sustainability of reputations in games with imperfect public monitoring. It is impossible to maintain a permanent reputation for playing a strategy that does not eventually play an equilibrium of the game without uncertainty about types. Thus, a player cannot indefinitely sustain a reputation for non-credible behavior in the presence of imperfect monitoring. Journal of Eco...

Imperfect Monitoring and Impermanent Reputations1

We study the long-run sustainability of reputations in games with imperfect public monitoring. It is impossible to maintain a permanent reputation for playing a strategy that does not play an equilibrium of the game without uncertainty about types. Thus, a player cannot indefinitely sustain a reputation for non-credible behavior in the presence of imperfect monitoring. Journal of Economic Liter...

Impermanent types and permanent reputations

We study the impact of unobservable stochastic replacements for the long-run player in the classical reputation model with a long-run player and a series of short-run players. We provide explicit lower bounds on the Nash equilibrium payoffs of a long-run player, both ex-ante and following any positive probability history. Under general conditions on the convergence rates of the discount factor ...

Experiencing the Architecture of the Incomplete, Imperfect, and Impermanent

Reputation and impermanent types

I consider a version of the chain store game where the incumbent firm’s type evolves according to a Markov process with two states: a “tough” type who always fights entry, and a “weak” type who prefers to accommodate. There exists a minimal level of persistence necessary for the incumbent to be able to sustain any reputation for being tough. Above that level, as the number of markets T increase...