Censorship and Reputation
Loading...
Access rights
openAccess
Journal Title
Journal ISSN
Volume Title
A1 Alkuperäisartikkeli tieteellisessä aikakauslehdessä
This publication is imported from Aalto University research portal.
View publication in the Research portal
View/Open full text file from the Research portal
Other link related to publication
View publication in the Research portal
View/Open full text file from the Research portal
Other link related to publication
Author
Date
2023-02
Department
Major/Subject
Mcode
Degree programme
Language
en
Pages
32
497-528
497-528
Series
AMERICAN ECONOMIC JOURNAL: MICROECONOMICS, Volume 15, issue 1
Abstract
I study how a firm manages its reputation by both investing in the quality of its product and censoring, hiding bad news from consumers. Without censorship, the threat of bad news provides strong incentives for investment. I highlight discontinuities in the firm's maximum equilibrium payoff that censorship creates. When censorship is inexpensive, the firm never invests and a patient firm's payoffs approach the lowest possible. In contrast, when censorship is moderately expensive, there exist equilibria where product quality is persistently high and payoffs approach the first-best, which can exceed the maximum equilibrium payoff if it was unable to censor.Description
Keywords
Other note
Citation
Hauser , D 2023 , ' Censorship and Reputation ' , American Economic Journal: Microeconomics , vol. 15 , no. 1 , pp. 497-528 . https://doi.org/10.1257/mic.20200266
