Consumer Networks and Firm Reputation: A First Experimental Investigation
Research output: Working paper
Documents
- 0728
Final published version, 146 KB, PDF document
Arguing that consumers are the carriers of firms' reputations, we examine the role of consumer networks for trust in markets that suffer from moral hazard. When consumers are embedded in a network, they can exchange information with their neighbours about their private experiences with different sellers. We find that such information exchange fosters firms' incentives for reputation building and, thus, enhances trust and efficiency in markets. This efficiency-enhancing effect is already achieved with a rather low level of network density
Original language | English |
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Publisher | Department of Economics, University of Copenhagen |
Number of pages | 11 |
Publication status | Published - 2007 |
- Faculty of Social Sciences - trust, consumer economics, moral hazard, information conditions, reputation
Research areas
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ID: 1524855