A model of gradual reputation formation through a process of continuous investment in product quality is developed. We assume that the ability to produce high-quality products requires continuous investment and that as a consequence of informational frictions, such as search costs, information...

We consider a repeated duopoly game where each firm privately chooses its investment in quality, and realized quality is a noisy indicator of the firm's investment. We focus on dynamic reputation equilibria, whereby consumers "discipline" a firm by switching to its rival in the case that the...

We consider how facilitating consumer's ability to compare firms' past performace with that of their competitors affects firms' incentives to invest in quality of experience goods. We show that, counterintuitively, when consumers are better informed and investment in quality is noisy, firms may...

We consider a repeated duopoly game where each firm privately chooses its investment in quality, and realized quality is a noisy indicator of the firm's investment. We focus on dynamic reputation equilibria, whereby consumers "discipline" a firm by switching to its rival in the case that the...

We consider a repeated duopoly game where each firm privately chooses its investment in quality, and realized quality is a noisy indicator of the firm’s investment. We focus on dynamic reputation equilibria, whereby consumers ‘discipline’ a firm by switching to its rival in the case that...