New, Like New, or Very Good? Reputation and Credibility

• 成果类型: Article
• 署名作者: Jullien, Bruno; Park, In-Uck
• 署名单位: Universite de Toulouse; Universite Toulouse 1 Capitole; Toulouse School of Economics; Centre National de la Recherche Scientifique (CNRS); University of Bristol; Sungkyunkwan University (SKKU)
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1093/restud/rdu012
• 发表日期: 2014
• 页码: 1543-1574
• 关键词: Cheap talk; QUALITY; INFORMATION

摘要

We show that sellers may earn a reputation for their ability to deliver high-quality goods on average by honestly announcing the realized quality of items for sale every period. As the expected revenue stream from continuing with honest communication increases with their ability, high-ability sellers remain honest while low-ability sellers find it too costly and sometimes lie about quality for short-term gain. Thus, cheap-talk communication facilitates the market's learning of a seller's ability and strengthens reputation effects. We study this new reputation mechanism and the induced market dynamics, first when sellers cannot restart with a new identity and second when they can. We extend the analysis to various other situations such as voluntary refund and moral hazard.