Information exchange in laboratory markets: competition, transfer costs, and the emergence of reputation.

ABSTRACT: Public reputation mechanisms are an effective means to limit opportunistic behavior in markets suffering from moral hazard problems. While previous research was mostly concerned with the influence of exogenous feedback mechanisms, this study considers the endogenous emergence of reputation through deliberate information sharing among actors and the role of barriers in hindering information exchange. Using a repeated investment game, we analyze the effects of competition and transfer costs on players' willingness to share information with each other. While transfer costs are a direct cost of the information exchange, competition costs represent an indirect cost that arises when the transfer of valuable information to competitors comes at the loss of a competitive advantage. We show that bar

SUBMITTER: Hoffmann R 

PROVIDER: S-EPMC7954753 | biostudies-literature | 2021

REPOSITORIES: biostudies-literature