Fredrik Andersson

"Pooling reputations"

JEL codes: D21, L22
Keywords: Reputation; Complementary assets; New goods; Theory of the firm

Abstract: It is shown that reputations satisfy significant complementarity properties, providing a rationale for multi-product firms in the absence of technological or organisational economies of scope. The model developed is argued to throw light on advertising, brand names and expertise. It is also shown that a reputation for producing high quality of an old good may be necessary to introduce a new good. The complementarities are similar to those of physical assets in the property-rights approach to the theory of the firm. .