Limited Partnerships and Reputation Formation

NYU Working Paper No. S-CG-02-11

Journal of Financial and Quantitative Analysis, Vol. 39, No. 3, September 2004, pages: 631-659.

42 Pages Posted: 4 Nov 2008

See all articles by Jarl G. Kallberg

Jarl G. Kallberg

New York University (NYU) - Department of Finance

Crocker H. Liu

Arizona State University

Anand Srinivasan

National University of Singapore - Department of Finance

Date Written: November 2002

Abstract

This paper analyzes the optimal quality decision of a producer in a multi-period setting withreputation effects. Using a unique database of returns on real estate limited partnerships(RELPs), we empirically examine alternative theoretical predictions of optimal producerstrategy. In particular, we test whether the producers in our market invest in reputationbuilding by initially selling high quality goods and then lowering quality. Using a variety ofstatistical tests, we find evidence for reputation building, both in the aggregate and forindividual developers.

Suggested Citation

Kallberg, Jarl G. (Jerry) and Liu, Crocker H. and Srinivasan, Anand, Limited Partnerships and Reputation Formation (November 2002). NYU Working Paper No. S-CG-02-11, Journal of Financial and Quantitative Analysis, Vol. 39, No. 3, September 2004, pages: 631-659., Available at SSRN: https://ssrn.com/abstract=1295255

Jarl G. (Jerry) Kallberg (Contact Author)

New York University (NYU) - Department of Finance ( email )

Stern School of Business
44 West 4th Street
New York, NY 10012-1126
United States
212-998-0339 (Phone)
212-995-4233 (Fax)

Crocker H. Liu

Arizona State University ( email )

W.P. Carey School of Business
P.O. Box 873906
Tempe, AZ 85287-3906
United States
480-965-3259 (Phone)
480-965-8539 (Fax)

HOME PAGE: http://www.public.asu.edu/~chliu1

Anand Srinivasan

National University of Singapore - Department of Finance ( email )

Mochtar Riady Building
15 Kent Ridge Drive
Singapore, 119245
Singapore

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