Arbeitspapier

Observable Reputation Trading

Is the reputation of a firm tradable when the change in ownership is observable? We consider a competitive market in which a share of owners must retire in each period. New owners bid for the firms that are for sale. Customers learn the owner's type, which reflects the quality of the good or service provided, through experience. After observing an ownership change they may want to switch firm. However, in equilibrium, good new owners buy from good old owners and retain high-value customers. Hence reputation is a tradable intangible asset, although ownership change is observable.

Language
Englisch

Bibliographic citation
Series: SFB/TR 15 Discussion Paper ; No. 131

Classification
Wirtschaft
Market Structure, Pricing, and Design: General
Asymmetric and Private Information; Mechanism Design
Transactional Relationships; Contracts and Reputation; Networks
Information and Product Quality; Standardization and Compatibility
Subject
Reputation
ownership change
intangible assets
theory of the firm

Event
Geistige Schöpfung
(who)
Hakenes, Hendrik
Peitz, Martin
Event
Veröffentlichung
(who)
Sonderforschungsbereich/Transregio 15 - Governance and the Efficiency of Economic Systems (GESY)
(where)
München
(when)
2006

DOI
doi:10.5282/ubm/epub.13420
Handle
URN
urn:nbn:de:bvb:19-epub-13420-2
Last update
10.03.2025, 11:45 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Hakenes, Hendrik
  • Peitz, Martin
  • Sonderforschungsbereich/Transregio 15 - Governance and the Efficiency of Economic Systems (GESY)

Time of origin

  • 2006

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