On Reputation: A Microfoundation of Contract Enforcement and Price Rigidity

• 成果类型: Article
• 署名作者: Fehr, Ernst; Brown, Martin; Zehnder, Christian
• 署名单位: University of Zurich; University of Lausanne
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1111/j.1468-0297.2008.02240.x
• 发表日期: 2009
• 页码: 333-353
• 关键词: gift exchange; social preferences; implicit contracts; wage rigidity; labor-market; credit; CONSEQUENCES; COOPERATION; RECIPROCITY; fairness

摘要

We study the impact of reputational incentives in markets characterised by moral hazard problems. Social preferences have been shown to enhance contract enforcement in these markets, while at the same time generating considerable wage and price rigidity. Reputation powerfully amplifies the positive effects of social preferences on contract enforcement by increasing contract efficiency substantially. This effect is, however, associated with a considerable bilateralisation of market interactions, suggesting that it may aggravate price rigidities. Surprisingly, reputation in fact weakens the wage and price rigidities arising from social preferences. Thus, in markets characterised by moral hazard, reputational incentives unambiguously increase mutually beneficial exchanges, reduce rents, and render markets more responsive to supply and demand shocks.