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http://dspace.mediu.edu.my:8181/xmlui/handle/10419/18736| Title: | Umbrella branding and the provision of quality |
| Keywords: | D82 L14 M37 L15 ddc:330 umbrella branding reputation transfer signaling experience goods Absatzkooperation Produktqualität Markenartikel Produktimage Signalling Asymmetrische Information Moral Hazard |
| Issue Date: | 16-Oct-2013 |
| Publisher: | |
| Description: | Consider a two-product firm that decides on the quality of each product. Product quality is unknown to consumers. If the firm sells both products under the same brand name, consumers adjust their beliefs about quality subject to the performance of both products. We show that if the probability that low quality will be detected is in an intermediate range, the firm produces high quality under umbrella branding whereas it would sell low quality in the absence of umbrella branding. Hence, umbrella branding mitigates the moral hazard problem. We also find that umbrella branding survives in asymmetric markets and that even unprofitable products may be used to stabilize the umbrella brand. However, umbrella branding does not necessarily imply high quality; the firm may choose low-quality products with positive probability. |
| URI: | http://koha.mediu.edu.my:8181/xmlui/handle/10419/18736 |
| Other Identifiers: | http://hdl.handle.net/10419/18736 ppn:477512615 |
| Appears in Collections: | EconStor |
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