Decision Making Under Asymmetric Information in Markets for Experience Goods

Download or read book Decision Making Under Asymmetric Information in Markets for Experience Goods written by Daniel Kaimann and published by . This book was released on 2015 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In four different chapters, I describe how signals of quality affect consumer perceptions and derive managerial implications and suggestions for future research. However, I focus on the analysis and the comparison of expressed opinions of professional critics and word-of-mouth and on the study of the commercial success of brand extension products and franchise titles. The four analyses of the entertainment market do not only differ in terms of the film and video game industry but also by the econometric approaches combining classical variable-oriented analyses and novel qualitative comparative analyses of signals. Variable-oriented analysis focuses on the empirical identification of the net effects of independent variables on one or more dependent variables. In variable-oriented analyses, linear, additive models test causality and are primarily based on correlation relationships. In contrast, qualitative comparative analysis studies causation with set-theoretic relationships. Whereas variable-oriented analysis is based on linear, additive models and thus on single paths that lead to the outcome of interest, qualitative comparative analysis is able to model multiple distinct causal paths to the outcome. In conclusion, this research introduces two different approaches for quantifying signaling effects that influence the purchase decisions of customers under asymmetric information. Using proprietary data from the motion-picture and video game industry, we specifically show that brand extension strategies and critical reviews from both professional critics and word-of-mouth may lead to high market performance. ; eng