讲座题目：Truthful Reputation: Theory and Experiments in the Context of Investment Behavior
Abstract: This paper studies the impact of a reputation system that combines information related to truth-telling and information related to economic performance on firms’ and investors’ behavior in an investment game. Such a reputation system allows us to link the two important aspects of reputation - honesty and performance - which have been studied so far separately. We analyze firms’ and investors’ strategies using a cheap talk framework and use laboratory experiments to test the model’s predictions. Both in theory and in the experiments, we observe that firms’ truthful behavior can be induced via this reputation mechanism, especially for bad-type firms and environments in which the success rate is low. Second, the reputation system helps investors distinguish between good and bad investment firms via the reputation score, which explains the investors’ investment difference between good-type and bad-type firms. The higher the reputation score, the higher the propensity of investors to invest. Third, we find that different types of investment firms treat reputation differently: good-type firms’ announcements are positively impacted by their probability of success and reputation score while bad-type firms’ announcements are only related to the probability of success. Thus, although bad-type firms do not seem to care about reputation, the fact that only good firms treat reputation as an asset is enough to allow investors to distinguish good-type firms from bad-type firms. Our findings help inform questions related to the design of reputation systems in investment markets in future studies.