Submission 149
An Experiment on Reputation: Competition and Dissent
panel.3-224 - Floor 1-03
Presented by: Ascensión Andina-Díaz
This paper examines how reputational concerns, social comparisons, and signal correlation affect information transmission. Inspired by career concerns models, we design a laboratory experiment in which sellers with different initial reputations provide information about product quality, and buyers infer reputations through competitive auctions. The experiment consists of three treatments that vary the degree of competition between sellers and the correlation of their private information. Our main hypothesis is that when sellers care about their relative reputations (treatment 2) or when their private information is correlated (treatment 3), strong sellers may lie and contradict weaker rivals, thereby reducing the accuracy of information. In contrast, truthful information transmission is expected without such incentives (treatment 1). We also expect the competitive auction to enable buyers to elicit sellers’ posteriors, resulting in prices that depend on sellers' ability to establish a reputation for providing high-quality products.