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Home
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Working Papers
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The Costs and Benefits of Collective Reputation: Who gains and who loses from generic promotion programs?

Working Paper No. 189

Published: 2016
Category:
Economics

The Costs and Benefits of Collective Reputation: Who gains and who loses from generic promotion programs?

Olivier Gergaud, Florine Livat, Bradley Rickard & Frederic Warzynski
Full Text PDF
Abstract

In this paper we develop an original approach to evaluate the costs and benefits associ- ated to a generic promotion program using an application to Bordeaux wines. The benefit is computed from the marginal impact of the collective reputation of the program on the individual reputation of its members. These different marginal impacts are estimated us- ing detailed survey data about the image of Bordeaux wines in seven European countries. We find positive and significant spillover effects from the umbrella reputation (Bordeaux) that moreover increase with the individual reputation level of the wine. Controlling for the natural endogeneity of the collective reputation in this setup, we capture the impor- tant fact that this relationship is faced with marginal diminishing returns. These spillover effects, when significantly positive, vary from a minimum of 5% to a maximum of 15% of additional favorable quality opinions. We then show that some subregions are more likely to benefit from generic promotion programs, suggesting that fees should be established on a benefit-cost basis.

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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