Exit, Tweets, and Loyalty

Joshua Gans, Avi Goldfarb and Mara Lederman

American Economic Journal: Microeconomics, 2021, vol. 13, issue 2, 68-112

Abstract: Hirschman's Exit, Voice, and Loyalty highlights the role of "voice" when individuals confront an unexpected deterioration in quality. Yet, voice has received little attention. To motivate our empirical analysis, we develop a simple model of voice as the equilibrium of a relational contract between customers and firms. We use data on 4 million tweets to or about US airlines to study the relationship between quality, voice, and market structure. Voice increases when quality deteriorates. This relationship is greater for airlines that operate a large share of flights in a market. Supplemental analyses support a relational contracting role for voice.

JEL-codes: D83 L15 L82 L93 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Exit, Tweets, and Loyalty (2017)
Working Paper: Exit, Tweets and Loyalty (2017)
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DOI: 10.1257/mic.20180085

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