Exit, Tweets and Loyalty

Joshua Gans, Avi Goldfarb and Mara Lederman

No 23046, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Hirschman’s Exit, Voice, and Loyalty highlights the role of “voice” in disciplining firms for low quality. We develop a formal model of voice as a relational contact between firms and consumers and show that voice is more likely to emerge in concentrated markets. We test this model using data on tweets to major U.S. airlines. We find that tweet volume increases when quality – measured by on-time performance – deteriorates, especially when the airline operates a large share of the flights in a market. We also find that airlines are more likely to respond to tweets from consumers in such markets.

JEL-codes: L13 L14 L93 (search for similar items in EconPapers)
Date: 2017-01
New Economics Papers: this item is included in nep-com and nep-ind
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Citations: View citations in EconPapers (8)

Published as Joshua S. Gans & Avi Goldfarb & Mara Lederman, 2021. "Exit, Tweets, and Loyalty," American Economic Journal: Microeconomics, American Economic Association, vol. 13(2), pages 68-112, May.

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Journal Article: Exit, Tweets, and Loyalty (2021)
Working Paper: Exit, Tweets, and Loyalty (2017)
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