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Type | Journal Article |
Scope | Discipline-based scholarship |
Title | Selling when brand image matters |
Organization Unit | |
Authors |
|
Item Subtype | Original Work |
Refereed | Yes |
Status | Published in final form |
Language |
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Journal Title | Journal of Institutional and Theoretical Economics JITE |
Publisher | Mohr Siebeck |
Geographical Reach | international |
ISSN | 0932-4569 |
Volume | 167 |
Number | 1 |
Page Range | 102 - 118 |
Date | 2011 |
Abstract Text | This paper studies profit-maximizing seller behavior when brand image affects demand. We consider a seller facing a population of consumers with heterogeneous tastes regarding product quality and brand image. First, we analyze<I> active branding</I> by the seller through costly advertising. Our analysis shows that advertising, price, and profits are all increasing in the average valuation of brand image in the population. Second, we examine the role of<I> passive branding</I> emanating from the population's consumption of the product. We find that seller profits increase in the average degree of conformity in the population, whereas the price remains unaffected. (JEL: D42, L15, L21, M37) |
Free access at | Related URL |
Related URLs | |
Digital Object Identifier | 10.1628/093245611794656598 |
Other Identification Number | merlin-id:4160 |
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