Reputation in the Presence of Noisy Exogenous Learning

Ju Hu ()
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Ju Hu: Department of Economics, University of Pennsylvania

PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania

Abstract: This paper studies the reputation effect in which a long-lived player faces a sequence of uninformed short-lived players and the uninformed players receive informative but noisy exogenous signals about the type of the long-lived player. We provide an explicit lower bound on all Nash equilibrium payoffs of the long-lived player. The lower bound shows when the exogenous signals are sufficiently noisy and the long-lived player is patient, he can be assured of a payoff strictly higher than his minmax payoff.

Keywords: Reputation; repeated games; learning; relative entropy (search for similar items in EconPapers)
JEL-codes: C73 D82 D83 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2013-02-06
New Economics Papers: this item is included in nep-cta, nep-gth and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:pen:papers:13-009

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