Reciprocity, social ties, and competition in markets for experience goods
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Reciprocity, social ties, and competition in markets for experience goods. / Huck, Steffen; Tyran, Jean-Robert.
In: Journal of Socio-Economics, Vol. 36, No. 2, 2007, p. 191-203.Research output: Contribution to journal › Journal article › Research › peer-review
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TY - JOUR
T1 - Reciprocity, social ties, and competition in markets for experience goods
AU - Huck, Steffen
AU - Tyran, Jean-Robert
N1 - JEL Classification: D43, L14, Z13
PY - 2007
Y1 - 2007
N2 - 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 induce a positive externality for non-reciprocal customers who would, in the absence of reciprocal types, face market breakdown. This efficiency-enhancing effect of reciprocity is boosted when there are social ties between consumers and competition between firms. The existence of social ties or competition alone does not improve market performance
AB - 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 induce a positive externality for non-reciprocal customers who would, in the absence of reciprocal types, face market breakdown. This efficiency-enhancing effect of reciprocity is boosted when there are social ties between consumers and competition between firms. The existence of social ties or competition alone does not improve market performance
KW - Faculty of Social Sciences
KW - social networks
KW - reputation
KW - customer loyalty
U2 - 10.1016/j.socec.2005.11.051
DO - 10.1016/j.socec.2005.11.051
M3 - Journal article
VL - 36
SP - 191
EP - 203
JO - Journal of Behavioral and Experimental Economics
JF - Journal of Behavioral and Experimental Economics
SN - 2214-8043
IS - 2
ER -
ID: 409438