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Collective Brand Reputation

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  • Volker Nocke
  • Roland Strausz

Abstract

We develop a theory of collective brand reputation for markets in which product quality is jointly determined by local and global players. In a repeated game of imperfect public monitoring, we model collective branding as an aggregation of quality signals generated in different markets. Such aggregation yields a beneficial informativeness effect for incentivizing the global player. It however also induces harmful free-riding by local, market-specific players. The resulting trade-off yields a theory of optimal brand size and revenue sharing that applies to platform markets, franchising, licensing, umbrella branding, and firms with team production.

Suggested Citation

  • Volker Nocke & Roland Strausz, 2023. "Collective Brand Reputation," Journal of Political Economy, University of Chicago Press, vol. 131(1), pages 1-58.
    • Handle: RePEc:ucp:jpolec:doi:10.1086/720986
    DOI: 10.1086/720986
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • D20 - Microeconomics - - Production and Organizations - - - General
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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