"A" business by any other name: : firm name choice as a signal of firm quality

• Autores: Ryan C. McDevitt
• Localización: Journal of Political Economy, ISSN-e 1537-534X, Vol. 122, Nº. 4, 2014, págs. 909-944
• Idioma: inglés
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• Resumen

  • This paper considers when a firm�s deliberately chosen name can signal meaningful information. The average plumbing firm whose name begins with A or a number receives five times more service complaints than other firms and also charges higher prices. Relatedly, plumbers with A names advertise more in the Yellow Pages and on Google, and doing so is positively correlated with receiving complaints. As the use of A names is more prevalent in larger markets, I reconcile these findings with a simple model in which firms have different qualities and consumers have heterogeneous search costs.