Warranty Signalling and Reputation

Subramanian Balachander ()
Additional contact information
Subramanian Balachander: Krannert Graduate School of Management, Purdue University, West Lafayette, Indiana 47907

Management Science, 2001, vol. 47, issue 9, 1282-1289

Abstract: In this paper, we present a signalling-based explanation for the empirical phenomenon that a longer warranty may be offered by a product with lower quality. Our explanation hinges on differences in consumer knowledge about reliability of established and newer products. In a product market where a new entrant competes with an established product, we show that signalling behavior leads to an outcome where the less reliable product may carry the longer warranty.

Keywords: Marketing Strategy; Competition; Game Theory; Signaling; Warranty Policy (search for similar items in EconPapers)
Date: 2001
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (27)

Downloads: (external link)
http://dx.doi.org/10.1287/mnsc.47.9.1282.9783 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:47:y:2001:i:9:p:1282-1289

Access Statistics for this article

More articles in Management Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().