TDPE presents: Gautum Bose

"The Fragmentation of Reputation" Gautam Bose University of New South Wales This paper investigates the use of reputation in an economy where principals hire agents for two different kinds of tasks, in which the agents have differing aptitudes. Principal-agent matches are remade every period, but a principal can acquire some information on the past behavior of her current agent. I consider two different reputation mechanisms—one in which an agent’s past record of defections makes no reference to the kind of task (Integrated Reputation), and another in which information about past defections is available separately for each task (Fragmented Reputation). The two kinds of reputation can be interpreted as “personal honor” and performance record (e.g. credit history) respectively. Gautam Bose is at the School of Economics at the University of New South Wales in Sydney, Australia. His research interests are in development economics and applied economic theory.