Reputation Building under Observational Learning

• 成果类型: Article
• 署名作者: Pei, Harry
• 署名单位: Northwestern University
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1093/restud/rdac052
• 发表日期: 2023
• 页码: 1441-1469
• 关键词: Repeated games

摘要

A patient seller interacts with a sequence of myopic consumers. Each period, the seller chooses the quality of his product, and a consumer decides whether to trust the seller after she observes the seller's actions in the last K periods (limited memory) and at least one previous consumer's action (observational learning). However, the consumer cannot observe the seller's action in the current period. With positive probability, the seller is a commitment type who plays his Stackelberg action in every period. I show that under limited memory and observational learning, consumers are concerned that the seller will not play his Stackelberg action when he has a positive reputation and will play his Stackelberg action after he has lost his reputation. Such a concern leads to equilibria where the seller receives a low payoff from building a reputation. I also show that my reputation failure result hinges on consumers' observational learning.