Variable temptations and black mark reputations
By: Christina Aperjis, Yali Miao, Richard J. Zeckhauser
Contributors: Miao, Yali; Zeckhauser, Richard; National Bureau of Economic Research
Series: NBER working paper series -- working paper 16423; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 16423.
Publisher: National Bureau of Economic Research
Published: 2010
Place of publication: Cambridge, MA
Language: eng
Format: [electronic resource] /
Description: "In a world of imperfect information, reputations often guide the sequential decisions to trust and to reward trust.  We consider two-player situations, where the trusted player, called the temptee, has a temptation to betray.  The strength of the temptation to betray varies from encounter to encounter.  We set aside any information about types and examine how reputations work when the temptees are the same in terms of morals and self control.  We refer to a recorded betrayal as a black mark and focus on mechanisms that only reveal the number of black marks of a temptee.  We show that the greater the number of black marks, the less likely the temptee is to betray.  We then study the different equilibria that emerge, depending on which side of the market has the ability to specify the equilibrium.  In closing, we generalize to cases where the number of encounters is also recorded"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 2/15/2011.

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