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Atlantic Economic Journal

, Volume 31, Issue 1, pp 32–50 | Cite as

Reputation deals: A theory of endogenous teams

  • Günther Lang
Articles

Abstract

This paper complements the traditional theory of teams [Fama, 1980; Holmstrom, 1982a, 1982b] by introducing endogenous team formation by agents who are concerned with their reputations and are informed about the types of their potential teammates. Such a constellation leads to a tradeoff between joining a high-productivity type but a low-reputation partner. Gains from trade are analyzed, both, for the case of non-transferable and transferable utility, and the lessons are discussed that can be learned from observing reputation deals. Finally a signaling model of teaming is developed that captures in a fully rational way the process of information acquisition by the agents' strategic opponent: the market.

Keywords

International Economic Public Finance Signaling Model Information Acquisition Traditional Theory 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© International Atlantic Economic Society 2003

Authors and Affiliations

  • Günther Lang
    • 1
  1. 1.Universidade Nova de LisboaPortugal

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