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"A" Business by Any Other Name: Firm Name Choice as a Signal of Firm Quality

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  • Ryan C. McDevitt

Abstract

This paper considers when a firm's deliberately chosen name can signal meaningful information. The average plumbing firm whose name begins with A or a number receives five times more service complaints than other firms and also charges higher prices. Relatedly, plumbers with A names advertise more in the Yellow Pages and on Google, and doing so is positively correlated with receiving complaints. As the use of A names is more prevalent in larger markets, I reconcile these findings with a simple model in which firms have different qualities and consumers have heterogeneous search costs.

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  • Ryan C. McDevitt, 2014. ""A" Business by Any Other Name: Firm Name Choice as a Signal of Firm Quality," Journal of Political Economy, University of Chicago Press, vol. 122(4), pages 909-944.
    • Handle: RePEc:ucp:jpolec:doi:10.1086/676333
    DOI: 10.1086/676333
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    References listed on IDEAS

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