Moorthy, Sridhar - In: Marketing Science 31 (2012) 5, pp. 756-770
This paper asks whether brand extension can serve as a signal of product quality given that it costs less than a new … brand. (Existing literature has assumed either that brand extension is cost-neutral or that it costs more.) I show that it … unique; a pooling equilibrium also exists in which brand extension signals nothing. For another, the separating equilibrium …