期刊名称：Discussion Papers / Department of Economics, University of Essex
出版年度：2007
卷号：2007
出版社：University of Essex
摘要：The Reputation of a natural person is anchored by his type, the characterisitics
invariant over time. Since the members change from time to time, an organization
has no type. Then how can it derive reputation now from its past? And if it
bears reputation without backed by a fixed type, what is the reputation's
dynamic? The paper presents an OLG model to address the two questions in which
an organization is purely a name used consecutively by its owners, each working
for one period only. It is common knowledge that today's owner has nothing to do
with yesterday's. However, in the second-best equilibrium, names with good
histories are owned by high quality sellers. Thus reputed names keep performing
well, making sense of reputation. To enable high quality sellers outbid low
quality ones for reputed names, the reputation has to have some specific
dynamics. The paper fully derives the dynamics in the second-best, which has the
four features: (1) increasing after a success; (2) decreasing after a failure;
(3) destroyed by it totally when the reputation is already low enough; (4)top
firms keeping their reputation even after a failure since they set honest prices
that tell the quality of their products. These features are empirically
testable.
