What is the role of reputation in repeated games?
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In repeated games, reputation plays a crucial role by influencing future interactions. Players are motivated to cooperate or avoid harmful actions to maintain a good reputation, which helps ensure long-term benefits. A strong reputation can act as a deterrent for cheating, while a bad reputation may lead to less favorable outcomes or retaliation in future rounds. Reputation serves as a mechanism for enforcing cooperative behavior and fostering trust over time.