Share the Fame or Share the Blame? The Reputational Implications of Partnerships

Luís Almeida Costa and Luis Vasconcelos ()

Journal of Economics & Management Strategy, 2010, vol. 19, issue 2, 259-301

Abstract: We use an adverse selection model to study the dynamics of firms' reputations when firms implement joint projects. We show that in the case of joint projects a firm's reputation does not necessarily increase following a success and does not necessarily decrease following a failure. We also study how reputation considerations affect firms' decisions to participate in joint projects. We show that a high‐reputation partner is not necessarily preferable to a low‐reputation partner and, when implementation of the joint project by a single firm is possible, a high‐quality partner may not be preferable to a low‐quality partner.

Date: 2010
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https://doi.org/10.1111/j.1530-9134.2010.00252.x

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Persistent link: https://EconPapers.repec.org/RePEc:bla:jemstr:v:19:y:2010:i:2:p:259-301

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