You are judged by the company you keep: Reputation leverage in vertically related markets

Arbeitspapier

This paper analyzes a mechanism through which a supplier of unknown quality can overcome its asymmetric information problem by selling via a reputable downstream …rm. The supplier’s adverse-selection problem can be solved if the downstream …rm has established a reputation for delivering high quality vis-à-vis the supplier. The supplier may enter the market by initially renting the downstream …rm’s reputation. The downstream …rm may optimally source its input externally, even though sourcing internally would be better in terms of productive e¢ ciency. Since an entrant in the downstream market may lack reputation, it may su¤er from a reputational barrier to entry arising from higher input costs.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper Series ; No. 16-07

Classification and Topics

• Classification: Wirtschaft ; Monopoly; Monopolization Strategies ; Legal Monopolies and Regulation or Deregulation ; Economics of Regulation ; Industrial Policy; Sectoral Planning Methods
• Subject: Adverse Selection ; Certi fication Intermediaries ; Incumbency Advantage ; Experience Goods ; Outsourcing ; Branding ; Barriers to Entry ; Lieferantenmanagement ; Marketingkooperation ; Reputation ; Adverse Selektion ; Erfahrungsgüter ; Outsourcing ; Signalling ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Choi, Jay Pil ; Peitz, Martin
• Event: Veröffentlichung
• (who): University of Mannheim, Department of Economics
• (where): Mannheim
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/149584
• URN: urn:nbn:de:bsz:180-madoc-405603
• Last update: 10.03.2025, 11:42 AM CET