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| Title: | | Umbrella branding and external certification  |
| Authors: | | Hakenes, Hendrik Peitz, Martin |
| Issue Date: | | 2008 |
| Series/Report no.: | | Preprints of the Max Planck Institute for Research on Collective Goods 2008,10 |
| Abstract: | | In a market environment with random detection of product quality, a firm can employ umbrella branding as a strategy to convince consumers of the high quality of its products. Alternatively, a firm can rely on external certification of the quality of one or both of its products. We characterize equilibria in which umbrella branding fully or partially substitutes for external certification. We also show that the potential to signal quality is improved if consumers condition their beliefs on the source of information, namely whether information comes from external certification or from random detection. |
| Subjects: | | Umbrella branding certification signalling |
| JEL: | | L14 L15 M37 D82 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Preprints of the Max Planck Institute for Research on Collective Goods
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