Optimal Brand Umbrella Size
In a framework or repeate -purchase experience goo s with seller's moral hazar , umbrella branding may improve the terms of the "implicit contract" between firm an consumers, whereby the ¯firm invests in quality an consumers p ay a high price. The reason is that the costs from cheating consumers are greater under umbrella branding (loss of reputation in all products), which implies that the high- uality equilibrium is more stable. The reverse side of this coin is that, if reputation breaks own in one pro uct (which is a istinct possibility in a worl with imperfect observability), then the ba news travel faster un er umbrella branding.
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|Date of creation:||2001|
|Date of revision:|
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- Hakenes, Hendrik & Peitz, Martin, 2004.
"Umbrella branding and the provision of quality,"
04-51, Sonderforschungsbreich 504.
- Hakenes, Hendrik & Peitz, Martin, 2006. "Umbrella Branding and the Provision of Quality," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 132, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Hendrik Hakenes & Martin Peitz, 2004. "Umbrella Branding and the Provision of Quality," CESifo Working Paper Series 1373, CESifo Group Munich.
- Hakenes, Hendrik & Peitz, Martin, 2004. "Umbrella Branding and the Provision of Quality," Sonderforschungsbereich 504 Publications 04-51, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
- Cai, Hongbin, 2004.
"Firm Reputation and Horizontal Integration,"
Santa Cruz Department of Economics, Working Paper Series
qt6rk9f1fm, Department of Economics, UC Santa Cruz.
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- Hongbin Cai & Ichiro Obara, 2008. "Firm Reputation and Horizontal Integration," Levine's Working Paper Archive 122247000000002038, David K. Levine.
- Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, March.
- Sullivan, Mary, 1990. "Measuring Image Spillovers in Umbrella-Branded Products," The Journal of Business, University of Chicago Press, vol. 63(3), pages 309-29, July.
- Sappington, David E M & Wernerfelt, Birger, 1985. "To Brand or Not to Brand? A Theoretical and Empirical Question," The Journal of Business, University of Chicago Press, vol. 58(3), pages 279-93, July.
- Choi, Chong Ju & Scarpa, Carlo, 1992. "Credible spatial preemption through reputation extension," International Journal of Industrial Organization, Elsevier, vol. 10(3), pages 439-447, September.
- Porter, Robert H., 1983. "Optimal cartel trigger price strategies," Journal of Economic Theory, Elsevier, vol. 29(2), pages 313-338, April.
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