Globalization, Superstars, and the Importance of Reputation: Theory & Evidence from the Wine Industry

Michael Gibbs, Mikel Tapia and Frédéric Warzynski
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Mikel Tapia: Universidad Carlos III de Madrid, Postal: Universidad Carlos III de Madrid

No 09-3, Working Papers from University of Aarhus, Aarhus School of Business, Department of Economics

Abstract: We develop a simple model of the effects of reputation on wine prices. An increasing fraction of consumers who are “naïve” (less well informed about wine quality) results in a stronger sensitivity of wine prices to ratings of quality. We then use data on prices and Robert Parker’s ratings of wines, to show that prices have become more related to Parker ratings over time. In addition, we find that a change in Parker rating has a stronger effect on price, the stronger is the wine’s reputation.

Keywords: No; keywords (search for similar items in EconPapers)
JEL-codes: A10 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2009-02-09
New Economics Papers: this item is included in nep-agr, nep-cul and nep-mkt
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Citations: View citations in EconPapers (6)

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