Modeling the „Visitors to Rome“ effect: Reputation Building in Anglo-Saxon Buyout Funds in Japan

Georg Blind and Lottanti von Mandach Stefania

MPRA Paper from University Library of Munich, Germany

Abstract: Stereotypes pose a major challenge to agents entering a foreign market. In order to overcome these stereotypes, visitor agents may decide to emulate domestic behavior. We develop a simple model of reputation building in transactions where identities are revealed and show that this tendency may even imply over-assimilation if stereotypes are sticky and assimilation efforts are not overly costly. The model predictions are tested using data on private equity-led buyout transactions in Japan from 1998 to 2015. While early transactions by Anglo-Saxon investors display marked differences, there is a strong tendency toward approximation of domestic standards, which eventually leads to over-compensation.

Keywords: Reputation building; stereotypes; strategically revealed preferences; buyout investments; heterogeneous preferences (search for similar items in EconPapers)
JEL-codes: D03 F65 G02 G23 Z13 (search for similar items in EconPapers)
Date: 2017-01-31
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/77761/1/MPRA_paper_77761.pdf original version (application/pdf)

Related works:
Journal Article: Of pride and prejudice: agent learning under sticky and persistent stereotype (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:77761

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().