Journal Article

A Theory of Collective Reputations (with applications to the persistence of corruption and to firm quality)

Jean Tirole

in The Review of Economic Studies

Published on behalf of Review of Economic Studies Ltd

Volume 63, issue 1, pages 1-22
Published in print January 1996 | ISSN: 0034-6527
e-ISSN: 1467-937X | DOI: http://dx.doi.org/10.2307/2298112
A Theory of Collective Reputations (with applications to the persistence of corruption and to firm quality)

Show Summary Details

Preview

The paper is a first attempt at modelling the idea of group reputation as an aggregate of individual reputations. A member's current incentives are affected by his past behaviour and, because his track record is observed only with noise, by the group's past behaviour as well. The paper thus studies the joint dynamics of individual and collective reputations and derives the existence of stereotypes from history dependence rather than from a multiplicity of equilibria or from the existence of a common trait as is usually done in the literature. It shows that new members of an organization may suffer from an original sin of their elders long after the latter are gone, and it derives necessary and sufficient conditions under which group reputations can be rebuilt. Last, the paper applies the theory to analyse when a large firm can maintain a reputation for quality.

Journal Article.  0 words. 

Subjects: Economics

Full text: subscription required

How to subscribe Recommend to my Librarian

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content.