Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/26947
Authors: 
Hakenes, Hendrik
Peitz, Martin
Year of Publication: 
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

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