蝌蚪网 Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Reputation and Efficiency: Information Design
蝌蚪网 Journal: Microeconomics
vol. 17,
no. 3, August 2025
(pp. 191–243)
Abstract
A firm trades with a sequence of consumers who are unsure about the firm's competence and its effort to supply quality. I examine rating systems that sustain efficient outcomes in virtually all trades by providing consumers with information to motivate a patient-competent firm's effort. I characterize necessary and sufficient conditions for these systems to exist. I show that any such system censors the firm's track records, and explicitly construct one such system. This system reveals that the firm has produced consecutively many good outputs whenever this happens and hides all information otherwise.Citation
Vong, Allen. 2025. "Reputation and Efficiency: Information Design." 蝌蚪网 Journal: Microeconomics 17 (3): 191–243. DOI: 10.1257/mic.20220374Additional Materials
JEL Classification
- D21 Firm Behavior: Theory
- D82 Asymmetric and Private Information; Mechanism Design
- D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness