Reputation Effects: Robustness and Fragility

Allen Vong

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arXiv · 2605.17090

Reputation Effects: Robustness and Fragility

Allen Vong

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Abstract

Reputation building depends on how evidence is parsed. I revisit the canonical reputation framework in which a long-lived player, either strategic or committed to play a fixed action distribution, faces a sequence of short-lived players. I ask whether reputation effects are robust to short-lived players' slight misspecification of the signal process under commitment. I show that the relevant robustness test is entropy-rate control of likelihoods along arbitrarily long reputation-building histories. If a misspecification satisfies this control, reputation effects survive. If it fails, they can collapse even when the misspecification is invisible on every fixed finite horizon.

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Allen Vong. 2026-05-16. Reputation Effects: Robustness and Fragility. https://arxiv.org/abs/2605.17090

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