may be fired or promoted. This allows us to study how the agent's effort decision depends on his current reputation …---with reputation we refer to the beliefs about the agent's future productivity. We shall show that the market's and the agent …'s problems can be written recursively. We find that the relationship between the agent's decisions and his current reputation is …

minimal level of persistence necessary for the incumbent to be able to sustain any reputation for being tough. Above that … incumbent’s type is fixed. One interpretation is that reputation is not permanent, but must be renewed occasionally …

Infinitely repeated games have been used to argue that reputation can substitute for commitment in monetary …