If a product has two dimensions of quality, one observable and one not, a firm can use observable quality as a signal of unobservable quality. The correlation between consumers' valuation of high quality in each dimension is a key determinant of the feasibility of such signaling. A firm may use...

This article examines the possibility that consumers will adopt an inefficient standard. When there are successive generations of consumers, the current generation will not consider the costs and benefits to past and future generations of adopting a new standard. If a standard is proprietary,...