Something to prove: reputation in teams

This is the pre-peer reviewed version of the following article: Bar‐Isaac, H. (2007), Something to prove: reputation in teams. The RAND Journal of Economics, 38: 495-511. doi:10.1111/j.1756-2171.2007.tb00080.x, which has been published in final form at https://doi.org/10.1111/j.1756-2171.2007.tb00080.x . This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions.Agents work for their own reputations when young but for their firms' when old. An individual with an established reputation cannot credibly commit to exerting effort when working alone. However, by hiring and working with juniors of uncertain reputation, seniors will have incentives to exert effort. Incentives for young agents arise from a concern for their own reputation (and the opportunity to take over the firm), whereas older agents work for the reputation of their firms (and the opportunity to sell out to juniors). Thus, the article explains the choice to work in teams. It also exemplifies how type uncertainty in reputation models may be endogenously and strategically introduced.ESRC (R42200034040