The Economics of Collective Brands
AbstractWe consider the consequences of a shared brand name such as geographical names used to identify high quality products, for the incentives of otherwise autonomous firms to invest in quality. We contend that such collective brand labels improve communication between sellers and consumers, when the scale of production is too small for individual firms to establish reputations on a stand alone basis. This has two opposing effects on member firms’ incentives to invest in quality. On the one hand, it increases investment incentives by increasing the visibility and transparency of individual member firms, which increases the return from investment in quality. On the other hand, it creates an incentive to free ride on the group’s reputation, which can lead to less investment in quality. We identify parmater values under which collective branding delivers higher quality than is achievable by stand alone firms.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Department of Economics, Bar-Ilan University in its series Working Papers with number 2010-11.
Date of creation: Jul 2010
Date of revision:
Contact details of provider:
Postal: Faculty of Social Sciences, Bar Ilan University 52900 Ramat-Gan
Phone: Phone: +972-3-5318345
Web page: http://econ.biu.ac.il
More information through EDIRC
This paper has been announced in the following NEP Reports:
- NEP-AGR-2010-07-24 (Agricultural Economics)
- NEP-ALL-2010-07-24 (All new papers)
- NEP-MKT-2010-07-24 (Marketing)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Robert Evans & Timothy W. Guinnane, 2007.
"Collective Reputation, Professional Regulation and Franchising,"
Cowles Foundation Discussion Papers
1627, Cowles Foundation for Research in Economics, Yale University.
- Robert Evans & Timothy W Guinnane, 2007. "Collective Reputation, Professional Regulation and Franchising," Levine's Bibliography 122247000000001563, UCLA Department of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Department of Economics).
If references are entirely missing, you can add them using this form.