The benefit of collective reputation

• 成果类型: Article
• 署名作者: Neeman, Zvika; Ory, Aniko; Yu, Jungju
• 署名单位: Tel Aviv University; Yale University; City University of Hong Kong
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12296
• 发表日期: 2019
• 页码: 787-821
• 关键词: brand extension; INFORMATION; QUALITY; signal; firm

摘要

We study a model of reputation with two long-lived firms who operate under a collective brand or as two individual brands. Firms' investments in quality are unobserved and can only be sustained through reputational concerns. In a collective brand, consumers cannot distinguish between the two firms. In the long run, this generates incentives to free-ride on the other firm's investment, but in the short run, it mitigates the temptation to milk a good reputation. The signal structure and consumers' prior beliefs determine which effect dominates. We interpret our findings in light of the type of industry in which the firms operate.