Jamal Awil

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Committing costly signals lets honest agents distinguish themselves credibly [causal]

The first, and to my mind most serious, weakness of this model is that there is nothing which enables the honest salesman to distinguish himself from the dishonest one. Everything the former can do the latter can do as well. The dishonest type is the cancerous cell which 'acts' like the healthy one. It is here that the role of commitments can assume importance. If the stake is high enough the honest salesman will search for ways of persuading customers that he really is honest; he will be willing to spend resources to distinguish himself from his possible counterpart. This is not included in the foregoing model of reputation acquisition.

Builds on: "Reputation-building requires sacrificing short-term gains for honesty."

Diego Gambetta, Trust - Making and Breaking…, loc. 1006