Seller reputation is an important asset because buyers often choose sellers on the basis of their reputation. This is particularly true when the quality of the good or service transacted is hard to measure and the parties cannot perfectly contract on the outcome of the transaction. As a consequence, the seller will be mindful of building and maintaining a good reputation through the information...

Abstract This paper studies the effect of trade opportunities on a seller’s incentive to acquire information through experimentation. I characterize unique equilibrium outcome and discuss effects variations in structure probability trade. The main result is that more accurate for buyer can reduce social welfare. Efficiency requires offers price seller always accepts experiments when it socially...