Globalization, Superstars, and the Importance of Reputation: Theory & Evidence from the Wine Industry
AbstractWe develop a simple model of the effects of reputation on wine prices. An increasing fraction of consumers who are “naïve” (less well informed about wine quality) results in a stronger sensitivity of wine prices to ratings of quality. We then use data on prices and Robert Parker’s ratings of wines, to show that prices have become more related to Parker ratings over time. In addition, we find that a change in Parker rating has a stronger effect on price, the stronger is the wine’s reputation.
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Bibliographic InfoPaper provided by University of Aarhus, Aarhus School of Business, Department of Economics in its series Working Papers with number 09-3.
Length: 33 pages
Date of creation: 09 Feb 2009
Date of revision:
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Postal: The Aarhus School of Business, Prismet, Silkeborgvej 2, DK 8000 Aarhus C, Denmark
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Find related papers by JEL classification:
- A10 - General Economics and Teaching - - General Economics - - - General
This paper has been announced in the following NEP Reports:
- NEP-AGR-2009-05-09 (Agricultural Economics)
- NEP-ALL-2009-05-09 (All new papers)
- NEP-CUL-2009-05-09 (Cultural Economics)
- NEP-MKT-2009-05-09 (Marketing)
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- Corsi, Alessandro & Strøm, Steinar, 2013. "The Price Premium for Organic Wines: Estimating a Hedonic Farm-gate Price Equation," Memorandum 07/2013, Oslo University, Department of Economics.
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