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Home
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Working Papers
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Collective Reputation Effects: An Empirical Appraisal

Working Paper No. 73

Published: 2010
Category:
Economics

Collective Reputation Effects: An Empirical Appraisal

Olivier Gergaud & Florine Livat
Full Text PDF
Abstract

This paper is an attempt to shed some empirical light on image linkages that exist between a collective umbrella brand and its related individual components. To tackle this issue, we estimate an interaction model in which a single collective reputation both determines and is determined by a series of individual reputations à la Tirole (1996).
From an application to Bordeaux wines using detailed survey data collected in seven European countries, we get positive and significant spillover effects from the umbrella reputation (Bordeaux) which are found to increase with the individual reputation level of the wine. Controlling for the natural endogeneity of collective reputation in this setup, allows to capture the important fact that this relationship is faced with marginal diminishing returns. In other words that the marginal impact of Bordeaux as an umbrella brand actually tends to decrease to zero (and not to increase in a linear way) as the reputation level of its entities goes up. These spillover effects, when significantly positive, vary from a minimum of 5% to a maximum of 15% of addi- tional favorable quality opinions.

Submission

Please send your papers as PDF files to the editor, Victor Ginsburgh, at vginsbur@ulb.ac.be
Papers will be quickly reviewed, prior to potential posting on the website. Decision will be to post or not, possibly with short comments, but without referee reports. The decision will be based primarily on the suitability of the paper’s topic to the aims of the Association.
Such decisions are independent of publication decisions for the Journal of Wine Economics.

Working Paper publication requires that at least one author
is a regular member of AAWE.

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