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The Dynamics of Collective Reputation

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  • Levin Jonathan

    (Stanford University, jdlevin@stanford.edu)

Abstract

I present a stochastic version of Tirole's (1996) collective reputation model. In equilibrium, group behavior is persistent due to complementarity between the current incentives of group members and the group's reputation, which depends on its history. A group can maintain a strong reputation even as conditions become unfavorable, but 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.

Suggested Citation

  • Levin Jonathan, 2009. "The Dynamics of Collective Reputation," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 9(1), pages 1-25, August.
    • Handle: RePEc:bpj:bejtec:v:9:y:2009:i:1:n:27
    DOI: 10.2202/1935-1704.1548
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    Cited by:

    1. Kim, Young-Chul & Loury, Glenn, 2012. "Collective Reputation and the Dynamics of Statistical Discrimination," MPRA Paper 54950, University Library of Munich, Germany, revised 31 Mar 2014.
    2. Felix Bracht & Jeroen Mahieu & Steven Vanhaverbeke, 2023. "The signaling value of legal form in debt financing," CEP Discussion Papers dp1914, Centre for Economic Performance, LSE.
    3. Mikhail Yakovlevich Veselovsky & Pavel Pavlovich Pilipenko & Vladimir Gavrilovich Savenko & Anna Gennadyevna Glebova & Lyudmila Aleksandrovna Shmeleva, 2017. "The Organization of the Innovation Transfer in the Agro-industrial Complex of Russia," European Research Studies Journal, European Research Studies Journal, vol. 0(3A), pages 484-499.
    4. Lily Hu & Yiling Chen, 2017. "A Short-term Intervention for Long-term Fairness in the Labor Market," Papers 1712.00064, arXiv.org, revised Feb 2018.
    5. Aidin Hajikhameneh & Jared Rubin, 2019. "Exchange in the Absence of Legal Enforcement: Reputation and Multilateral Punishment under Uncertainty," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 35(1), pages 192-237.
    6. Zvika Neeman & Aniko Öry & Jungju Yu, 2019. "The benefit of collective reputation," RAND Journal of Economics, RAND Corporation, vol. 50(4), pages 787-821, December.
    7. Guimaraes, Bernardo & Machado, Caio, 2013. "Demand expectations and the timing of stimulus policies," MPRA Paper 48895, University Library of Munich, Germany.
    8. Marimon, Ramon & Nicolini, Juan Pablo & Teles, Pedro, 2012. "Money is an experience good: Competition and trust in the private provision of money," Journal of Monetary Economics, Elsevier, vol. 59(8), pages 815-825.
    9. Baniak Andrzej & Grajzl Peter, 2013. "Equilibrium and Welfare in a Model of Torts with Industry Reputation Effects," Review of Law & Economics, De Gruyter, vol. 9(2), pages 265-302, October.
    10. Pierre-Yves Yanni, 2012. "Coarse Information and Entrepreneurial Risk Choice," 2012 Meeting Papers 1142, Society for Economic Dynamics.
    11. Fulvio Fontini & Katrin Millock & Michele Moretto, 2018. "Collective reputation with stochastic production and unknown willingness to pay for quality," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 20(2), pages 387-410, April.
    12. Kevin Lang & Jee-Yeon K. Lehmann, 2012. "Racial Discrimination in the Labor Market: Theory and Empirics," Journal of Economic Literature, American Economic Association, vol. 50(4), pages 959-1006, December.
    13. Pierre Fleckinger & Matthieu Glachant & Gabrielle Moineville, 2017. "Incentives for Quality in Friendly and Hostile Informational Environments," American Economic Journal: Microeconomics, American Economic Association, vol. 9(1), pages 242-274, February.
    14. Daniela Benavente, 2010. "Geographical Indications: The Economics of Claw-Back," IHEID Working Papers 11-2010, Economics Section, The Graduate Institute of International Studies.
    15. Felix Bracht & Jeroen Mahieu & Steven Vanhaverbeke, 2022. "The signaling value of legal form in debt financing," POID Working Papers 052, Centre for Economic Performance, LSE.
    16. Jie Bai & Ludovica Gazze & Yukun Wang, 2019. "Collective Reputation in Trade: Evidence from the Chinese Dairy Industry," CID Working Papers 366, Center for International Development at Harvard University.
    17. Bernardo Guimaraes & Caio Machado & Ana E. Pereira, 2020. "Dynamic coordination with timing frictions: Theory and applications," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 22(3), pages 656-697, June.
    18. Jie Bai & Ludovica Gazze & Yukun Wang, 2019. "Collective Reputation in Trade: Evidence from the Chinese Dairy Industry," NBER Working Papers 26283, National Bureau of Economic Research, Inc.
    19. Michael Junho Lee & Daniel Neuhann, 2019. "A Dynamic Theory of Collateral Quality and Long-Term Interventions," Staff Reports 894, Federal Reserve Bank of New York.
    20. Daniela Benavente, 2010. "The Economics of Geographical Indications: GIs Modelled As Club Assets," IHEID Working Papers 10-2010, Economics Section, The Graduate Institute of International Studies.
    21. Kim, Young Chul & Loury, Glenn, 2009. "Group Reputation and the Dynamics of Statistical Discrimination," MPRA Paper 18765, University Library of Munich, Germany.
    22. Kaifu Zhang, 2015. "Breaking Free of a Stereotype: Should a Domestic Brand Pretend to Be a Foreign One?," Marketing Science, INFORMS, vol. 34(4), pages 539-554, July.
    23. Bracht, Felix & Mahieu, Jeroen & Vanhaverbeke, Steven, 2023. "The signaling value of legal form in debt financing," LSE Research Online Documents on Economics 121335, London School of Economics and Political Science, LSE Library.
    24. Giacomo Negro & Michael T. Hannan & Magali Fassiotto, 2015. "Category Signaling and Reputation," Organization Science, INFORMS, vol. 26(2), pages 584-600, April.
    25. Bracht, Felix & Mahieu, Jeroen & Vanhaverbeke, Steven, 2024. "The signaling value of legal form in entrepreneurial debt financing," Journal of Business Venturing, Elsevier, vol. 39(3).

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    More about this item

    Keywords

    collective reputation; statistical discrimination;

    JEL classification:

    • J29 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Other

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