Abstract :
We often observe that reforms are instigated mostly in times of difficulties, even though the same reforms could help currently prosperous organizations as well. In this paper we tried to explain this phenomenon using a simple reputation game. The results show that the organizations tend not to try a reform when the current profits or welfare levels are high, even when it is expected that the future profits or welfare levels would be very low without a reform. Also, the results show that the participants in the reform, who would lose their surpluses if the reform is carried out, will not be cooperative with the reform when the future profits or welfare levels of the organizations are expected to be high.
