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The Use of Quality and Reputation Indicators by Consumers: The Case of Bordeaux Wine Author info | Abstract | Publisher info | Download info | Related research | Statistics Landon, Stuart
Smith, Constance
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The absolute and relative impact of current quality and reputation variables on consumer decisions are examined using data from the market for Bordeaux wine. The estimates indicate that a model of consumer decision making which incorporates information on reputation (past quality) and collective reputation (average group quality) rejects alternative models that include current quality. The results also indicate that reputation has a large impact on the willingness to pay of consumers, that long term reputation is considerably more important than short term quality improvements, and that consumers react slowly to changes in product quality. Collective reputation is shown to have an impact on consumer willingness to pay that is as large as that of individual firm reputation. If reputation and collective reputation effects are ignored, the estimated impact of current quality and short term changes in quality on consumer behaviour are overstated.
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
9283.
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Date of creation: Mar 1997Date of revision:
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Find related papers by JEL classification: M3 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising D8 - Microeconomics - - Information, Knowledge, and Uncertainty L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
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references Cited by : (explanations , 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.)
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