Reputational Incentives for Restaurant Hygiene

摘要: How can consumers be assured that firms will endeavor to provide good quality when is unobservable prior purchase? We test the hypothesis reputational incentives are effective at caus ing restaurants maintain hygiene quality. find chain affiliation provides andfranchised units tend free-ride on reputation. also show regional variation in degree of repeat customers affects strength for both and nonchain restaurants. Despite these incentives, a policy intervention form posted grade cards causes significant improvements restaurant hygiene. (JEL118,119, L14, L83).