[eru]

The paper explicitly has to exclude reputation as a mechanism.

They did think this through, but that doesn't mean reputation doesn't work in the real world.

[godelski]

I think you should read the paper. Did they exclude reputation or did reputation not matter to the equation? Are you going to criticize the fact that they "excluded" the color of a person's eyes?

https://www.sfu.ca/~wainwrig/Econ400/akerlof.pdf