Is Bigger Better? Customer Base Expansion through Word‐of‐Mouth Reputation
Bibliographic Data
| ID | 10177484 |
|---|---|
| Authors | Rafael Rob (University of Pennsylvania), Arthur Fishman (0000-0002-5176-6773, Bar-Ilan University) |
| Year | 2005 |
| Volume | 113 |
| Issue | 5 |
| Pages | 1146-1162 |
| Publication date | 2005-09-19 |
| Open Access | No |
| Type | ARTICLE |
| Venue | Journal of Political Economy (JOURNAL) |
| Journal identifiers | ISSN: 0022-3808 • E-ISSN: 1537-534X |
| Publisher | University of Chicago Press (PUBLISHER • US) |
| DOI | 10.1086/444552 |
| OpenAlex | W1990778091 |
| Language | EN |
| Citations received | 5 |
| References cited | 14 |
A model of gradual reputation formation through a process of continuous investment in product quality is developed. We assume that the ability to produce high‐quality products requires continuous investment and that as a consequence of informational frictions, such as search costs, information about firms' past performance diffuses only gradually in the market. This leads to a dual process of growth of a firm's customer base and an increase in the firm's investment in quality. The model predicts, therefore, that the longer its tenure as a high‐quality producer, the more a firm invests in quality. We relate this finding to empirical work on online commerce as well as on traditional industries
Base (topology · Business · Customer base · Dual (grammatical number · Economics · Industrial organization · Investment (military · Microeconomics · Process (computing · Product (mathematics · Quality (philosophy · Reputation · Word of mouth · Work (physics · Computer Science · Consumer Market Behavior and Pricing · Corporate Finance and Governance · Engineering · Firm Innovation and Growth · Marketing
Reputation and imperfect information
Markov-Perfect Industry Dynamics
Premiums for High Quality Products as Returns to Reputations
Entry, Exit, and firm Dynamics in Long Run Equilibrium
Patterns of Firm Entry and Exit in U.S. Manufacturing Industries
Selection and the Evolution of Industry
Reputation Acquisition in Debt Markets
The Market for Reputations as an Incentive Mechanism
The Role of Market Forces in Assuring Contractual Performance
| Citations per year | 0.25 |
|---|---|
| Citation span | 2006 - 2024 (19) |
| Highly cited | No |