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Reputation in Dynamic Games

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  • Celentani, Marco
  • Pesendorfer, Wolfgang

Abstract

We consider an infinite dynamic game played by one large player and a large number of small players. State variables are allowed, and public histories include only the play of the large player, the aggregate play of the small players and the aggregate state variable. We use a reputational argument that restricts the set of equilibria to profiles that give the large player almost what he could get by committing to an optimal strategy as his discount factor approaches 1. Furthermore we identify a class of dynamic games where this result holds even if the small players' discount factor also approaches 1.
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Suggested Citation

  • Celentani, Marco & Pesendorfer, Wolfgang, 1996. "Reputation in Dynamic Games," Journal of Economic Theory, Elsevier, vol. 70(1), pages 109-132, July.
    • Handle: RePEc:eee:jetheo:v:70:y:1996:i:1:p:109-132
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    Cited by:

    1. Chantal Marlats, 2021. "Reputation effects in stochastic games with two long-lived players," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 71(1), pages 1-31, February.
    2. repec:dau:papers:123456789/7684 is not listed on IDEAS
    3. Levine, David K & Pesendorfer, Wolfgang, 1995. "When Are Agents Negligible?," American Economic Review, American Economic Association, vol. 85(5), pages 1160-1170, December.
    4. Marco Celentani & Drew Fudenberg & David K. Levine & Wolfgang Pesendorfer, 1996. "Maintaining a Reputation against a Patient Opponent," Levine's Working Paper Archive 2015, David K. Levine.
    5. Drew Fudenberg & David Levine & Wolfgang Pesendorfer, 2008. "When Are Nonanonymous Players Negligible?," World Scientific Book Chapters, in: Drew Fudenberg & David K Levine (ed.), A Long-Run Collaboration On Long-Run Games, chapter 6, pages 95-120, World Scientific Publishing Co. Pte. Ltd..
    6. Modesto, Leonor & Thomas, Jonathan P., 2001. "An analysis of labour adjustment costs in unionized economies," Labour Economics, Elsevier, vol. 8(4), pages 475-501, September.
    7. Peter J. Hammond & Yeneng Sun, 2000. "Joint Measurability and the One-way Fubini Property for a Continuum of Independent Random Variables," Working Papers 00008, Stanford University, Department of Economics.
    8. Phelan, Christopher, 2006. "Public trust and government betrayal," Journal of Economic Theory, Elsevier, vol. 130(1), pages 27-43, September.
    9. Sorin, Sylvain, 1999. "Merging, Reputation, and Repeated Games with Incomplete Information," Games and Economic Behavior, Elsevier, vol. 29(1-2), pages 274-308, October.
    10. Harish Guda & Milind Dawande & Ganesh Janakiraman, 2021. "“Seemingly‐Beneficial” Interventions," Production and Operations Management, Production and Operations Management Society, vol. 30(10), pages 3337-3353, October.
    11. Lingfang (Ivy) Li, 2010. "Reputation, Trust, and Rebates: How Online Auction Markets Can Improve Their Feedback Mechanisms," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 19(2), pages 303-331, June.
    12. Melkonian, Tigran A., 1998. "Two essays on reputation effects in economic models," ISU General Staff Papers 1998010108000012873, Iowa State University, Department of Economics.
    13. Marco Celentani & Drew Fudenberg & David K. Levine & Wolfgang Pesendorfer, 2008. "Maintaining A Reputation Against A Long-Lived Opponent," World Scientific Book Chapters, in: Drew Fudenberg & David K Levine (ed.), A Long-Run Collaboration On Long-Run Games, chapter 9, pages 163-176, World Scientific Publishing Co. Pte. Ltd..

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    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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