Governance, reputation, crises and recovery: An experiment

Thomas H. Noe; Michael J. Rebello; Thomas A. Rietz

doi:10.1016/j.jebo.2026.107686

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Governance, reputation, crises and recovery: An experiment

Journal article

Peer reviewed

Governance, reputation, crises and recovery: An experiment

Thomas H. Noe, Michael J. Rebello and Thomas A. Rietz

Journal of economic behavior & organization, Vol.248, 107686

08/2026

DOI: 10.1016/j.jebo.2026.107686

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Abstract

We model and experimentally test the relationship between a firm’s reputation and its governance when firms can repair reputation damage through reform. Our model shows that conditions for establishing a reputation depend on whether control of firm operations is delegated to professional managers. Moreover, although the option to reform always dilutes firms’ incentive to commit to reputable behavior, delegation ameliorates the dilution. We assess the robustness of our model to behavioral deviations from optimal behavior through a laboratory experiment. The results of this experiment are directionally consistent with the model’s predictions.

Adverse selection

Corporate governance

Experiment

Reputation

Stakeholders

Details

Title: Subtitle: Governance, reputation, crises and recovery: An experiment
Creators: Thomas H. Noe - Science Oxford
Michael J. Rebello - The University of Texas at Dallas
Thomas A. Rietz - University of Iowa
Resource Type: Journal article
Publication Details: Journal of economic behavior & organization, Vol.248, 107686
DOI: 10.1016/j.jebo.2026.107686
ISSN: 0167-2681
eISSN: 1879-1751
Publisher: Elsevier B.V
Grant note: Oxford University Centre for Corporate Reputation
Language: English
Date published: 08/2026
Academic Unit: Economics; Finance
Record Identifier: 9985183418302771

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