Chapter 4
Reputations in Repeated Games
George J. Mailath*; Larry Samuelson† * Department of Economics, University of Pennsylvania, Philadelphia, PA 19104, USA† Department of Economics, Yale University, New Haven, CT 06520, USA
Abstract
This paper surveys work on reputations in repeated games of incomplete information. We first develop the adverse-selection approach to reputations in the context of a long-lived player, who may be a “normal” type or one of a number of “commitment” types, and who faces a succession of short-lived players. We use entropy-based arguments both to establish a lower bound on the equilibrium payoff of the long-lived player (demonstrating ex ante reputation effects) and to show that this lower bound is asymptotically ...
