Market Share Indicates Quality
AbstractMarket share and quality, or customer satisfaction, go hand in hand. Yet the inference that higher market share indicates higher quality is seldom made. The skepticism is in part fueled by elitism, the association of mass popularity with lower quality, and by cynicism, ascribing market leadership to an entrenched position. We find that though such skepticism is often justified, it is correct to make a Bayesian inference that the product with the higher market share has the better quality under rather tame assumptions.
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Bibliographic InfoPaper provided by The Center for the Study of Rationality, Hebrew University, Jerusalem in its series Discussion Paper Series with number dp590.
Length: 12 pages
Date of creation: Oct 2011
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-11-28 (All new papers)
- NEP-IND-2011-11-28 (Industrial Organization)
- NEP-MKT-2011-11-28 (Marketing)
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