Reputation converts a transaction from a single-stage zero-sum game into a repeated positive-sum game by holding out the promise of future business opportunities, so the value created is the improved reputation of both parties.
Source quote, verbatim
Reputation does this with the promise of future business opportunities. This changes the transaction from a single-stage zero-sum game into a repeated positive-sum game.
From
Craig Calcaterra, Wulf A. Kaal, The Importance of Reputation for the Evolution of Decentralization (2021), Chapter. Reputation, p. 2 https://ssrn.com/abstract=3782210 · source PDF
Cite as
Craig Calcaterra, Wulf A. Kaal, The Importance of Reputation for the Evolution of Decentralization (2021). SSRN: https://ssrn.com/abstract=3782210
Holds when
parties expect continued participation in the network
restateskaal:claim:3782193-032 Adding reputation to the contracting game converts it from a single-stage zero-sum game into a repeated positi...
extended_bykaal:claim:3782214-001 Reputation changes the incentive structure of a decentralized organization from a single stage, zero sum game ...
extendskaal:claim:3441904-043 Reputation based DAO governance turns a zero sum game into a positive sum game, because members are given ince...
extendskaal:claim:3782193-031 Honesty would be the wrong strategy for an agent if the contract were anonymous and its resolution did not aff...
restateskaal:claim:3782205-021 Reputation rather than money is the proper motivator of good behavior in business and governance, because prop...
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