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The Klein-Leffler model explains how the benefit of future reputation can induce firms to produce high quality … experience goods, either in a monopoly or an industry with competing firms. We show that reputation can be leveraged across …
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Consider a two-product firm that decides on the quality of each product. Product quality is unknown to consumers. If the firm sells both products under the same brand name, consumers adjust their beliefs about quality subject to the performance of both products. We show that if the probability...
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