Variable Temptations and Black Mark Reputations

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Variable Temptations and Black Mark Reputations

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dc.contributor.author Aperjis, Christina
dc.contributor.author Miao, Yali
dc.contributor.author Zeckhauser, Richard Jay
dc.date.accessioned 2012-11-19T20:14:43Z
dc.date.issued 2012
dc.identifier.citation Aperjis, Christina, Yali Miao, and Richard J. Zeckhauser. 2012. Variable Temptations and Black Mark Reputations. HKS Faculty Research Working Paper Series RWP12-055 (Revision of RWP11-020), John F. Kennedy School of Government, Harvard University. en_US
dc.identifier.uri http://nrs.harvard.edu/urn-3:HUL.InstRepos:9924086
dc.description.abstract In a world of imperfect information, reputations often guide the sequential decisions to trust and to reward trust. We consider two-player situations, where the players meet but once. One player – the truster – decides whether to trust, and the other player – the temptee – has a temptation to betray when trusted. The strength of the temptation to betray may vary from encounter to encounter, and is independently distributed over time and across temptees. We refer to a recorded betrayal as a black mark. We study how trusters and temptees interact in equilibrium when past influences current play only through its effect on certain summary statistics. We first focus on the case that players only condition on the number of black marks of a temptee and study the different equilibria that emerge, depending on whether the trusters, the temptees, or a social planner has the ability to specify the equilibrium. We then show that conditioning on the number of interactions as well as on the number of black marks does not prolong trust beyond black marks alone. Finally, we consider more general summary statistics of a temptee’s past and identify conditions under which there exist equilibria where trust is possibly suspended only temporarily. en_US
dc.language.iso en_US en_US
dc.publisher John F. Kennedy School of Government, Harvard University en_US
dc.relation.isversionof http://web.hks.harvard.edu/publications/workingpapers/citation.aspx?PubId=8676 en_US
dash.license LAA
dc.subject decision making en_US
dc.subject trust en_US
dc.title Variable Temptations and Black Mark Reputations en_US
dc.type Research Paper or Report en_US
dc.description.version Author's Original en_US
dc.relation.journal HKS Faculty Research Working Paper Series en_US
dash.depositing.author Zeckhauser, Richard Jay
dc.date.available 2012-11-19T20:14:43Z

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