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arXiv · 2604.08616

Reputational Spillovers

Aditya Kuvalekar·Anna Sanktjohanser
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Abstract

We analyze a reputational bargaining game in which a central player negotiates simultaneously with two peripheral players. Each player is either rational or a commitment type who never concedes and insists on a fixed share, and concessions are publicly observed. The central player's type is global, so actions in one dispute update beliefs in the other and generate reputational spillovers. The game admits a unique equilibrium, enabling a sharp comparison with the bilateral benchmark of Abreu and Gul (2000). Spillovers are payoff-relevant if and only if a peripheral is uniquely the most reputable player initially. In that case, spillovers overturn the bilateral prediction that toughness pays: the central player is never strictly better off and can be strictly worse off; the strongest peripheral loses; and the weakest peripheral can benefit, especially when the center's higher-stakes dispute is with the other peripheral.

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Aditya Kuvalekar, Anna Sanktjohanser. 2026-04-09. Reputational Spillovers. https://arxiv.org/abs/2604.08616

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