This paper explores how social interactions among consumers shape markets. In a two-country model, consumers meet and exchange information about the quality of the goods. As information spreads, the demands evolve, affecting the prices and quantities manufactured by profit-maximizing firms. We...

Business friendship literature draw largely upon relationship norms to study effects of friendship on customer’s product valuation. The present study provide a whole new analysis to explore the mechanism behind the effects of friendship on valuation as well as perceived product quality based...

Reciprocal customers may disproportionately improve the performance of markets for experience goods. Reciprocal customers reward (punish) firms for providing good (bad) quality by upholding (terminating) the customer relation. This may induce firms to provide good quality which, in turn, may...

This paper examines endogenous quality provision by firms with market power when social influence plays a role in consumers' purchasing decisions. A monopolist chooses price and quality of a single product to sell to consumers with unit mass. Quality has two dimensions: m-quality, which...