Reputation in Long-Run Relationships

@article{Atakan2012ReputationIL,
  title={Reputation in Long-Run Relationships},
  author={Alp E. Atakan and Mehmet Ekmekci},
  journal={The Review of Economic Studies},
  year={2012},
  volume={79},
  pages={451-480}
}
We model a long-run relationship as an infinitely repeated game played by two equally patient agents. In each period, the agents play an extensive-form game of perfect information. There is incomplete information about the type of player 1 while player 2’s type is commonly known. We show that a sufficiently patient player 1 can leverage player 2’s uncertainty about his type to secure his highest payoff in any perfect Bayesian equilibrium of the repeated game. 

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