IDEAS home Printed from https://ideas.repec.org/p/hal/pseptp/hal-00813043.html
   My bibliography  Save this paper

Reputation with Analogical Reasoning

Author

Listed:
  • Philippe Jehiel

    (PSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, UCL - University College of London [London])

  • Larry Samuelson

    (Department of Economics - Yale University [New Haven])

Abstract

We consider a repeated interaction between a long-run player and a sequence of short-run players, in which the long-run player may either be rational or may be a mechanical type who plays the same (possibly mixed) action in every stage game. We depart from the classical model in assuming that the short-run players make inferences by analogical reasoning, meaning that they correctly identify the average strategy of each type of long-run player, but do not recognize how this play varies across histories. Concentrating on 2 × 2 games, we provide a characterization of equilibrium payoffs, establishing a payoff bound for the rational long-run player that can be strictly larger than the familiar "Stackelberg" bound. We also provide a characterization of equilibrium behavior, showing that play begins with either a reputation-building or a reputation-spending stage (depending on parameters), followed by a reputation-manipulation stage.

Suggested Citation

  • Philippe Jehiel & Larry Samuelson, 2012. "Reputation with Analogical Reasoning," PSE-Ecole d'économie de Paris (Postprint) hal-00813043, HAL.
    • Handle: RePEc:hal:pseptp:hal-00813043
    DOI: 10.1093/qje/qjs031
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. David Ettinger & Philippe Jehiel, 2010. "A Theory of Deception," American Economic Journal: Microeconomics, American Economic Association, vol. 2(1), pages 1-20, February.
    2. Martin W. Cripps & George J. Mailath & Larry Samuelson, 2004. "Imperfect Monitoring and Impermanent Reputations," Econometrica, Econometric Society, vol. 72(2), pages 407-432, March.
    3. David Ettinger & Philippe Jehiel, 2010. "A Theory of Deception," American Economic Journal: Microeconomics, American Economic Association, vol. 2(1), pages 1-20, February.
    4. Liu, Qingmin & Skrzypacz, Andrzej, 2009. "Limited Records and Reputation," Research Papers 2030, Stanford University, Graduate School of Business.
    5. George J. Mailath & Larry Samuelson, 2001. "Who Wants a Good Reputation?," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 68(2), pages 415-441.
    6. Cripps, Martin W. & Mailath, George J. & Samuelson, Larry, 2007. "Disappearing private reputations in long-run relationships," Journal of Economic Theory, Elsevier, vol. 134(1), pages 287-316, May.
    7. Kreps, David M. & Wilson, Robert, 1982. "Reputation and imperfect information," Journal of Economic Theory, Elsevier, vol. 27(2), pages 253-279, August.
    8. Milgrom, Paul & Roberts, John, 1982. "Predation, reputation, and entry deterrence," Journal of Economic Theory, Elsevier, vol. 27(2), pages 280-312, August.
    9. Jehiel, Philippe, 2005. "Analogy-based expectation equilibrium," Journal of Economic Theory, Elsevier, vol. 123(2), pages 81-104, August.
    10. Drew Fudenberg & David K. Levine, 2008. "Reputation And Equilibrium Selection In Games With A Patient Player," World Scientific Book Chapters, in: Drew Fudenberg & David K Levine (ed.), A Long-Run Collaboration On Long-Run Games, chapter 7, pages 123-142, World Scientific Publishing Co. Pte. Ltd..
    11. repec:dau:papers:123456789/5434 is not listed on IDEAS
    12. Mailath, George J. & Samuelson, Larry, 2006. "Repeated Games and Reputations: Long-Run Relationships," OUP Catalogue, Oxford University Press, number 9780195300796.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jehiel, Philippe & Samuelson, Larry, 2023. "The analogical foundations of cooperation," Journal of Economic Theory, Elsevier, vol. 208(C).
    2. Harry Pei, 2020. "Trust and Betrayals: Reputational Payoffs and Behaviors without Commitment," Papers 2006.08071, arXiv.org.
    3. David Ettinger & Philippe Jehiel, 2021. "An experiment on deception, reputation and trust," Experimental Economics, Springer;Economic Science Association, vol. 24(3), pages 821-853, September.
    4. Yingkai Li & Harry Pei, 2020. "Misspecified Beliefs about Time Lags," Papers 2012.07238, arXiv.org.
    5. Jehiel, Philippe, 2015. "Investment strategy and selection bias: An equilibrium perspective on overconfidence," CEPR Discussion Papers 10868, C.E.P.R. Discussion Papers.
    6. Liu, Qingmin & Skrzypacz, Andrzej, 2014. "Limited records and reputation bubbles," Journal of Economic Theory, Elsevier, vol. 151(C), pages 2-29.
    7. Sperisen, Benjamin, 2018. "Bounded memory and incomplete information," Games and Economic Behavior, Elsevier, vol. 109(C), pages 382-400.
    8. Paul E. Fischer & Mirko S. Heinle & Kevin C. Smith, 2020. "Constrained listening, audience alignment, and expert communication," RAND Journal of Economics, RAND Corporation, vol. 51(4), pages 1037-1062, December.
    9. Philippe Jehiel, 2022. "Analogy-Based Expectation Equilibrium and Related Concepts:Theory, Applications, and Beyond," Working Papers halshs-03735680, HAL.
    10. Harry Pei, 2020. "Reputation for Playing Mixed Actions: A Characterization Theorem," Papers 2006.16206, arXiv.org, revised Apr 2021.
    11. Mailath, George J. & Samuelson, Larry, 2015. "Reputations in Repeated Games," Handbook of Game Theory with Economic Applications,, Elsevier.
    12. Bilancini, Ennio & Boncinelli, Leonardo, 2018. "Signaling to analogical reasoners who can acquire costly information," Games and Economic Behavior, Elsevier, vol. 110(C), pages 50-57.
    13. Andrew Mell, 2015. "Fooling Some of the People Some of the Time: Reputation Management and Optimal Betrayal," Economics Series Working Papers 770, University of Oxford, Department of Economics.
    14. Alessandro Pavan, 2014. "Attention, Coordination, and Bounded Recall," Discussion Papers 1576, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    15. Harry Pei, 2022. "Reputation Effects under Short Memories," Papers 2207.02744, arXiv.org, revised Jan 2023.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mailath, George J. & Samuelson, Larry, 2015. "Reputations in Repeated Games," Handbook of Game Theory with Economic Applications,, Elsevier.
    2. Ekmekci, Mehmet & Gossner, Olivier & Wilson, Andrea, 2012. "Impermanent types and permanent reputations," Journal of Economic Theory, Elsevier, vol. 147(1), pages 162-178.
    3. Guillermo Ordonez, 2005. "Don't Ask Why Things Went Wrong: Nested Reputation and Scapegoating Inefficiency," Levine's Working Paper Archive 618897000000000988, David K. Levine.
    4. Qingmin Liu, 2006. "Information Acquisition and Reputation Dynamics," Discussion Papers 06-030, Stanford Institute for Economic Policy Research.
    5. Ekmekci, Mehmet, 2011. "Sustainable reputations with rating systems," Journal of Economic Theory, Elsevier, vol. 146(2), pages 479-503, March.
    6. Alp E. Atakan & Mehmet Ekmekci, 2012. "Reputation in Long-Run Relationships," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(2), pages 451-480.
    7. Guillermo Ordonez, 2008. "Essays on Learning and Macroeconomics," Levine's Working Paper Archive 122247000000002250, David K. Levine.
    8. Heski Bar-Isaac & Joyee Deb, 2012. "Reputation for a Servant of Two Masters," Working Papers 12-08, New York University, Leonard N. Stern School of Business, Department of Economics.
    9. Liu, Qingmin & Skrzypacz, Andrzej, 2014. "Limited records and reputation bubbles," Journal of Economic Theory, Elsevier, vol. 151(C), pages 2-29.
    10. Miriam Schütte & Philipp Christoph Wichardt, 2013. "Delegation and Interim Performance Evaluation," CESifo Working Paper Series 4193, CESifo.
    11. Wiseman, Thomas, 2008. "Reputation and impermanent types," Games and Economic Behavior, Elsevier, vol. 62(1), pages 190-210, January.
    12. Bruno Jullien & In-Uck Park, 2009. "Seller Reputation and Trust in Pre-Trade Communication," Levine's Working Paper Archive 814577000000000330, David K. Levine.
    13. Bohren, J. Aislinn, 2024. "Persistence in a dynamic moral hazard game," Theoretical Economics, Econometric Society, vol. 19(1), January.
    14. Jihong Lee & Qingmin Liu, 2009. "Reputation and Repeated Bargaining with a Third Party," 2009 Meeting Papers 151, Society for Economic Dynamics.
    15. Aislinn Bohren, 2016. "Using Persistence to Generate Incentives in a Dynamic Moral Hazard Problem," PIER Working Paper Archive 16-024, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 15 Oct 2016.
    16. Nuh Aygün Dalkıran, 2016. "Order of limits in reputations," Theory and Decision, Springer, vol. 81(3), pages 393-411, September.
    17. Heski Bar-Isaac & Juanjo Ganuza, 2005. "Teaching to the top and searching for superstars," Working Papers 05-06, New York University, Leonard N. Stern School of Business, Department of Economics.
    18. Li, Yingkai & Pei, Harry, 2021. "Equilibrium behaviors in repeated games," Journal of Economic Theory, Elsevier, vol. 193(C).
    19. David K. Levine, 2021. "The Reputation Trap," Econometrica, Econometric Society, vol. 89(6), pages 2659-2678, November.
    20. J. Aislinn Bohren, 2011. "Stochastic Games in Continuous Time: Persistent Actions in Long-Run Relationships, Second Version," PIER Working Paper Archive 14-033, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 01 Aug 2014.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:pseptp:hal-00813043. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Caroline Bauer (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.