The Dynamics of Collective Reputation

Jonathan Levin

No 08-024, Discussion Papers from Stanford Institute for Economic Policy Research

Abstract: I present a stochastic version of Tirole's (1996) collective reputation model. In equilibrium, group behavior is persistent due to a complementarity between the group's reputation, which depends on the past behavior of group members, and current incentives. A group can maintain a strong reputation even as conditions become unfavorable, while an improvement in the environment may not help a group with a poor reputation. I also connect the model to the theory of statistical discrimination and show that the same mechanism can explain why discrimination might persist over time.

Keywords: Collective Reputation; Triole; Group Behavior; Statistical Discrimination (search for similar items in EconPapers)
JEL-codes: J29 (search for similar items in EconPapers)
Date: 2009-02
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Citations: View citations in EconPapers (30)

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Journal Article: The Dynamics of Collective Reputation (2009)
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