Share the fame or share the blame? The reputational implications of partnerships

• Author(s): Costa, Luís Almeida ; Vasconcelos, Luís
• Date: 2008
• Persistent ID: http://hdl.handle.net/10362/11587
• Origin: Repositório Institucional da UNL
• Subject(s): Reputation; Partnership; Joint project; Project performance; Bayesian updating
• Document Type: Other
• Language: English

Description

We use an adverse selection model to study the dynamics of firms' reputations when firms implement joint projects. We show that in contrast with projects implemented by a single firm, in the case of joint projects a firm's reputation does not necessarily increase following a success and does not necessarily decrease following a failure. We also study how reputation considerations affect firms ' decisions to participate in joint projects. We show that a high quality partner may not be preferable to a low quality partner, and that a high reputation partner is not necessarily preferable to a low reputation partner.