Is Bigger Better? Customer Base Expansion through Word‐of‐Mouth Reputation
构建了一个模型，说明企业通过持续投资产品质量逐步建立声誉，由于信息摩擦，客户基础增长与质量投资增加相互促进，预测高质量生产时间越长的企业投资越多。
A model of gradual reputation formation through a process of continuous investment in product quality is developed. We assume that the ability to produce high‐quality products requires continuous investment and that as a consequence of informational frictions, such as search costs, information about firms' past performance diffuses only gradually in the market. This leads to a dual process of growth of a firm's customer base and an increase in the firm's investment in quality. The model predicts, therefore, that the longer its tenure as a high‐quality producer, the more a firm invests in quality. We relate this finding to empirical work on online commerce as well as on traditional industries.