Competition, Reputation and Compliance
This paper displays a linear demand oligopoly model, in which firms endogenously decide whether to enter the market and whether to specialize on high or low quality products, and then repeatedly interact to sell experience goods. It shows that the intuition that low and rising prices grant compliance with quality promises extends to this setting, provided that high quality is sufficiently important to buyers.
|Date of creation:||Nov 2009|
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- Daughety, Andrew F. & Reinganum, Jennifer F., 2007.
"Competition and confidentiality: Signaling quality in a duopoly when there is universal private information,"
Games and Economic Behavior,
Elsevier, vol. 58(1), pages 94-120, January.
- Andrew F. Daughety & Jennifer F. Reinganum, 2004. "Competition and Confidentiality: Signaling Quality in a Duopoly when there is Universal Private Information," Vanderbilt University Department of Economics Working Papers 0417, Vanderbilt University Department of Economics.
- Milgrom, Paul & Roberts, John, 1986.
"Price and Advertising Signals of Product Quality,"
Journal of Political Economy,
University of Chicago Press, vol. 94(4), pages 796-821, August.
- Fluet, Claude & Garella, Paolo G., 2002.
"Advertising and prices as signals of quality in a regime of price rivalry,"
International Journal of Industrial Organization,
Elsevier, vol. 20(7), pages 907-930, September.
- Claude Fluet & Paolo G. Garella, 1999. "Advertising and Prices as Signals of Quality in a Regime of Price Rivalry," Cahiers de recherche du Département des sciences économiques, UQAM 9903, Université du Québec à Montréal, Département des sciences économiques.
- Yaron Yehezkel, 2008. "Signaling Quality in an Oligopoly When Some Consumers Are Informed," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 17(4), pages 937-972, December.
- Andrew F. Daughety & Jennifer F. Reinganum, 2008.
"Imperfect competition and quality signalling,"
RAND Journal of Economics,
RAND Corporation, vol. 39(1), pages 163-183.
- Andrew F. Daughety & Jennifer F. Reinganum, 2005. "Imperfect Competition and Quality Signaling," Vanderbilt University Department of Economics Working Papers 0520, Vanderbilt University Department of Economics.
- Russell Cooper & Thomas W. Ross, 1984. "Prices, Product Qualities and Asymmetric Information: The Competitive Case," Review of Economic Studies, Oxford University Press, vol. 51(2), pages 197-207.
- Bagwell, Kyle & Riordan, Michael H, 1991.
"High and Declining Prices Signal Product Quality,"
American Economic Review,
American Economic Association, vol. 81(1), pages 224-39, March.
- Klein, Benjamin & Leffler, Keith B, 1981. "The Role of Market Forces in Assuring Contractual Performance," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 615-41, August.
- P. Vanin, 2009. "Competition, Reputation and Cheating," Working Papers 683, Dipartimento Scienze Economiche, Universita' di Bologna.
- Overgaard, Per Baltzer, 1994. "Equilibrium effects of potential entry when prices signal quality," European Economic Review, Elsevier, vol. 38(2), pages 367-383, February.
- Carl Shapiro, 1983. "Premiums for High Quality Products as Returns to Reputations," The Quarterly Journal of Economics, Oxford University Press, vol. 98(4), pages 659-679.
- Mark N. Hertzendorf & Per Baltzer Overgaard, 2001. "Price Competition and Advertising Signals: Signaling by Competing Senders," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 10(4), pages 621-662, December.
- Helmut Bester, 1998. "Quality Uncertainty Mitigates Product Differentiation," RAND Journal of Economics, The RAND Corporation, vol. 29(4), pages 828-844, Winter.
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