RT Monograph
SR 00
A1 Hörner, Johannes
A1 Sanktjohanser, Anna
T1 Too Much of A Good Thing?
YR 2022
FD 2022-03
VO 22-1327
SP 60
K1 Trust
K1 Loyalty
K1 Imperfect Monitoring
AB We consider a repeated game, in which due to private information and a lack of flexible transfers, cooperation cannot be sustained efficiently. In each round, the buyer either buys from the seller or takes an outside option. The fluctuating outside option may be public or private information. When the buyer visits, the seller chooses what quality to provide. We find that the buyer initially forgoes mutually beneficial trades before then visiting more often than he would like to, myopically. Under private information, the relationship recurrently undergoes gradual self-reinforcing downturns when trust is broken and instantaneous recoveries when loyalty is shown.
T2 TSE Working Paper
PB TSE Working Paper
PP Toulouse, France
AV Published
LK https://publications.ut-capitole.fr/id/eprint/45138/
UL http://tse-fr.eu/pub/126845