Angry customers, e-word-of-mouth and incentives for quality provision

B-Tier
Journal: Journal of Economic Behavior and Organization
Year: 2012
Volume: 84
Issue: 3
Pages: 813-828

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Emotions are a significant determinant of consumer behavior. A customer may get angry if he feels that he is being treated unfairly by his supplier and that anger may make him more likely to switch to an alternative provider. We model the strategic interaction between firms that choose quality levels and anger-prone customers who pick their supplier based on their expectations of suppliers’ quality. Strategic interaction can allow for multiple equilibria including some in which no firm invests in high quality. Allowing customers to voice their anger on peer-review fora can eliminate low-quality equilibria, and may even support a unique equilibrium in which all firms choose high quality.

Technical Details

RePEc Handle
repec:eee:jeborg:v:84:y:2012:i:3:p:813-828
Journal Field
Theory
Author Count
2
Added to Database
2026-01-25