2024/04/29 by Daniel Luo, Luo, Daniel
Decision Sciences · #FOS: Economics and business #Game Theory and Applications #Theoretical Economics (econ.TH)
paper · pdf · doi:10.48550/arxiv.2404.18884
openalex publication_date 2024/04/29 · openalex created_date 2024/05/11 · openalex updated_date 2026/07/28
I study reputation formation when player actions endogenously determine the probability the game permanently ends. Exit can render reputation useless even to a patient player whose actions are perfectly monitored, in contrast to canonical commitment payoff theorems. However, I identify conditions for the long-run player to attain their Stackelberg payoff in all Markov equilibria. Along the way, I highlight the role Markov strategies play in pinning down the value of reputation. I apply my results to give qualified commitment foundations for the infinite chain-store game. I also analyze repeated global games with exit, and obtain new predictions about regime survival.