Product Quality, Reputation and Turnover

摘要: We consider a repeated duopoly game where each rm chooses its investment in quality, and realized quality is noisy indicator of the rm's investment. derive reputation equilibria, whereby consumers `discipline' by switching to rival case too low. The model predicts that rms with good charge higher price, sell bigger quantity have stock-market capitalization. Every so often, market subjected turnover, highquality / loses share, lowers price capitalization su®ers, while gains raises enjoys increased examine properties equilibria. In particular, we show equilibrium not e±cient or nearly even as discount factor goes 1. ¤Part this research was conducted Sekiguchi visiting University Pennsylvania. thanks Pennsylvania for kind hospitality. are also grateful Michihiro Kandori Hitoshi Matsushima, well seminar audiences at Kyusyu Tokyo, their helpful comments discussions. yDepartment Economics, Pennsylvania, 3718 Locust Walk, Philadelphia, PA. 19104-6297 zFaculty Kobe University, 2-1 Rokkodai-cho, Nada-ku, 657-8501,