Pure reputation models collapse because dishonest actors can mimic honest behavior perfectly

Evidence

The first, and to my mind most serious, weakness of this model is that there is nothing which enables the honest salesman to distinguish himself from the dishonest one. Everything the former can do the latter can do as well. The dishonest type is the cancerous cell which ‘acts’ like the healthy one. It is here that the role of commitments can assume importance. If the stake is high enough the honest salesman will search for ways of persuading customers that he really is honest; he will be willing to spend resources to distinguish himself from his possible counterpart. This is not included in the foregoing model of reputation acquisition. — Diego Gambetta, Trust - Making and Breaking Cooperative…, 1006

Categorization

• DEFINE: Defines the ‘signaling vs mimicry’ problem: without observable distinguishing commitments, reputation alone cannot separate honest from dishonest types.
• XREF: Directly parallel to the reader’s Luhmann/Hardin framing — observability is the substrate that lets signals separate types; Saramago’s blindness erases exactly this.
• SEED: Angle: ‘the honest signal problem’ — why symbolic commitments (wasteful but verifiable costs) are structurally necessary wherever reputation alone cannot distinguish types.