Observable Reputation Trading

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

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

Classification and Topics

• 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

Contributors, Places and Time

• 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

Further information

• DOI: doi:10.5282/ubm/epub.13420
• Handle: http://hdl.handle.net/10419/94042
• URN: urn:nbn:de:bvb:19-epub-13420-2
• Last update: 10.03.2025, 11:45 AM CET