Word-of-mouth communication and search

• 成果类型: Article
• 署名作者: Campbell, Arthur; Leister, C. Matthew; Zenou, Yves
• 署名单位: Monash University; Center for Economic & Policy Research (CEPR)
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12337
• 发表日期: 2020
• 页码: 676-712
• 关键词: consumer information; QUALITY; price; MARKET; networks; MODEL

摘要

We develop a word-of-mouth search model where information flows from the old to the new generation for an experience good with unknown quality. We study the features of the social network that determine product quality and welfare and characterize the demand-side (under provision of search effort) and supply-side (inefficient entry by firms) factors that result in inefficiencies. One striking result is to show that the more connected but also the less-unequal a friendship network is (in the sense of second order stochastic dominance of the degree distribution), the less can disreputable (low-quality) firms thrive in equilibrium.