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 price alone as a signal, or price and quality together. Both …

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 price alone as a signal, or price and quality together. Both …

One striking development associated with the explosion of e-commerce is the increased transparency of sellers' quality … history. In this paper we analyze how this affects firms' incentives to invest in quality when the outcome of investment is … uncertain. We identify two conflicting effects. On the one hand, reducing the consumer's cost of search for quality exacerbates …