Please use this identifier to cite or link to this item:
http://hdl.handle.net/2445/201941
Title: | Bad reputation with simple rating systems |
Author: | Lorecchio, Caio Paes Leme Monte, Daniel |
Keywords: | Competències professionals Expectatives racionals (Teoria econòmica) Sistemes d'informació Vocational qualifications Rational expectations (Economic theory) Information storage and retrieval systems |
Issue Date: | 1-Nov-2023 |
Publisher: | Elsevier |
Abstract: | We consider information censoring through finite memory as a device against bad reputational concerns. Our class of constrained information policies resembles common practices in online reputation systems, on which customers increasingly rely whenever hiring experts. In a world of repeated interactions between a long-lived expert and short-lived customers, Ely and Välimäki (2003) show that unlimited record-keeping may induce the expert to overchoose a certain action, seeking reputational gains. Consequently, welfare may reduce and markets may break down. We show that simple rating systems in such world help overcome market failures and improve upon both the full-memory and the no-memory cases. |
Note: | Reproducció del document publicat a: https://doi.org/10.1016/j.geb.2023.07.019 |
It is part of: | Games and Economic Behavior, 2023, vol. 142, p. 150-178 |
URI: | http://hdl.handle.net/2445/201941 |
Related resource: | https://doi.org/10.1016/j.geb.2023.07.019 |
ISSN: | 0899-8256 |
Appears in Collections: | Articles publicats en revistes (Economia) |
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