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Joint Product Signals of Product Quality


  • James E. McClure

    () (Department of Economics, Ball State University)

  • Lee C. Spector

    () (Department of Economics, Ball State University)


In the absence of other information about the quality of an experience good, the price of a jointly produced search good provides consumers with a signal of the former good’s quality.. This hypothesis provides an explanation for the heretofore unexplained pricing policies found in Barron’s and Umbeck’s (1984) empirical investigation of gasoline retailing.

Suggested Citation

  • James E. McClure & Lee C. Spector, 1991. "Joint Product Signals of Product Quality," Working Papers 199101, Ball State University, Department of Economics, revised Apr 1991.
  • Handle: RePEc:bsu:wpaper:199101

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    References listed on IDEAS

    1. Frank, Robert H, 1985. "The Demand for Unobservable and Other Nonpositional Goods," American Economic Review, American Economic Association, vol. 75(1), pages 101-116, March.
    2. 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.
    3. Nelson, Philip, 1974. "Advertising as Information," Journal of Political Economy, University of Chicago Press, vol. 82(4), pages 729-754, July/Aug..
    4. Barron, John M & Umbeck, John R, 1984. "The Effects of Different Contractual Arrangements: The Case of Retail Gasoline Markets," Journal of Law and Economics, University of Chicago Press, vol. 27(2), pages 313-328, October.
    5. Nelson, Phillip, 1970. "Information and Consumer Behavior," Journal of Political Economy, University of Chicago Press, vol. 78(2), pages 311-329, March-Apr.
    6. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, Oxford University Press, vol. 87(3), pages 355-374.
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    Cited by:

    1. George, Donald A R, 2012. "Technical progress and product reliability under competition and monopoly," SIRE Discussion Papers 2012-23, Scottish Institute for Research in Economics (SIRE).
    2. George, Donald A. R., 2000. "A model of endogenous quality management," Journal of Economics and Business, Elsevier, vol. 52(3), pages 289-304.
    3. Donald A. R. George, 2011. "Technical progress and product reliability under competition and monopoly," ESE Discussion Papers 211, Edinburgh School of Economics, University of Edinburgh.


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