towards a theory of reputation

[E. ALLEN SMITH]

From:	IN%"hfinney at shell.portal.com"  "Hal"  2-DEC-1995 16:27:08.83

I do think the idea of analyzing costs in terms of "throwing away your
reputation" by cheating and starting anew is an interesting approach.
The question is whether you can really quantify the value of a
reputation.  I know in business now corporations do carry on their books
something called "good will" which I believe is roughly the value of
their good name and trade marks.  However it is not normally considered
to be a major asset, I think.
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	How much of an asset it is considered to be tends to depend on the size
of the corporation and on the business. For instance, when one doctor buys out
another's practice, "good will" is usually one of the larger categories. In
this case, I believe (it's been a bit since I read about it) that this
essentially is the value of recommendations and of the name of the office.
	-Allen