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What's in a Name? Reputation as a Tradeable Asset

Working Paper No. 97-033

36 Pages Posted: 5 Apr 1998  

Steven Tadelis

University of California, Berkeley - Haas School of Business; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Date Written: February 1998

Abstract

I develop a model in which a firm's only asset is its name -- which is associated with reputation -- and study the forces which cause names to be valuable, tradeable assets. An adverse selection model in which shifts of ownership are not observable guarantees that in equilibrium the market for names is active. This result is robust to both finite and infinite horizons, in contrast to standard results in the game-theoretic reputation literature. I also show that only good types buying good names cannot be sustained in equilibrium. Finally, the reputational dynamics are consistent with the stylized facts, and compared to the game theoretic literature, they offer an alternative interpretation of reputation.

JEL Classification: C7, C82, D8

Suggested Citation

Tadelis, Steven, What's in a Name? Reputation as a Tradeable Asset (February 1998). Working Paper No. 97-033. Available at SSRN: https://ssrn.com/abstract=73868 or http://dx.doi.org/10.2139/ssrn.73868

Steven Tadelis (Contact Author)

University of California, Berkeley - Haas School of Business ( email )

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR) ( email )

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

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