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Contribution Details

Type Journal Article
Scope Discipline-based scholarship
Title Selling when brand image matters
Organization Unit
Authors
  • Stefan Buehler
  • Daniel Halbheer
Item Subtype Original Work
Refereed Yes
Status Published in final form
Language
  • English
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)
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Digital Object Identifier 10.1628/093245611794656598
Other Identification Number merlin-id:4160
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