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Competition between insurance companies for employees of a firm often increases the prices and reduces the availability of high-quality health plans offered to employees. An insurance company can reduce competition by signing an exclusive contract, which guarantees that the company is the only...
Persistent link: https://www.econbiz.de/10008765924
An entrepreneur with information about firm quality seeks financing from an uninformed investor in order to pay a worker. I show that if the worker, too, knows the true quality of the firm, then certain long term wage agreements can credibly signal firm quality. Such wage agreements have a low...
Persistent link: https://www.econbiz.de/10008776036
We analyze data from a variety of sources, including historical data from a women's clothing catalog, a field study in that catalog, survey responses to catalog stimuli, and grocery store data for frozen juice, toothpaste, and tuna. The analysis yields three conclusions. First, sale signs are...
Persistent link: https://www.econbiz.de/10008787556
. The net cost is the signaling cost that a high-quality type firm incurs to signal quality over a low-quality type firm. We … lower signaling costs. We also find that signaling using specialization is more likely in the presence of competition. …
Persistent link: https://www.econbiz.de/10008787757
When an improvable durable good (such as packaged software) saturates the market, the seller could be tempted to release new versions too frequently, hurting her profit. A novel contractual device, which I term as a Free New Version Rights warranty (free NVR warranty), can help the seller...
Persistent link: https://www.econbiz.de/10008787809
brand attributes and both prices and advertising signal brand quality. Four quality signaling mechanisms are at work: (1 … effects. Our results imply that price is an important quality-signaling mechanism and that frequent price cuts can have … significant adverse effects on brand equity. The role of advertising frequency in signaling quality is also significant, but it is …
Persistent link: https://www.econbiz.de/10008787869
Structural models integrate behavioral and psychological decision theory into economics models and are more aligned with the true underlying economic primitives of the consumers. This allows researchers to investigate more behavior-driven and process-oriented customer decision processes such as...
Persistent link: https://www.econbiz.de/10008787987
wholesale price, not a slotting allowance, is the manufacturer's preferred signaling instrument. Signaling with the wholesale … [Chu, Wujin. 1992. Demand signaling and screening in channels of distribution. (4, Fall) 327–347.]) have assumed that …
Persistent link: https://www.econbiz.de/10008789817
claim. The signaling explanation was motivated by extensive discussions over more than a year with a major catalog retailer … explanation for this counterintuitive finding appears to be the signaling theory. To investigate the long-term effects, the … envelope. The findings are consistent with customer beliefs in the signaling model: Offering installment billing lowers the …
Persistent link: https://www.econbiz.de/10008789828
in signaling demand. That is, when is it optimal for the manufacturer to use high advertising support, and when is it …-demand manufacturer's signaling strategy depends on three factors: the retailer's stocking costs, the intensity of retail competition, and … plays an important role in signaling when the retailer's stocking costs are high and the advertising effectiveness is low …
Persistent link: https://www.econbiz.de/10008789851