Unlocking Strategic Secrets: How to Dominate Reputation Games with Precision
Researchers used a stochastic control approach to study reputation games, where a player interacts with short-lived players over time. They found that equilibrium payoffs can be computed efficiently using dynamic programming. In the average-payoff setup, an optimal strategy was identified for the long-lived player. By analyzing different setups, they determined upper and lower bounds on the value of reputation. The study also explored the continuity of equilibrium payoffs based on prior beliefs.