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The Effect of Price on Firm Reputation / Michael Luca, Oren Reshef.
- Format:
- Book
- Author/Creator:
- Luca, Michael.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w27405.
- NBER working paper series no. w27405
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2020.
- Summary:
- While a business's reputation can affect its pricing, prices can also affect its reputation. To explore the effect of prices on reputation, we investigate daily data on menu prices and online ratings from a large rating and ordering platform. We find that a price increase of 1% leads to a decrease of 3%-5% in the average rating. Consistent with this, the overall distribution of ratings for cheaper restaurants is similar to that of more expensive restaurants. Finally, these effects don't seem to be driven by consumer retaliation against price changes, but by changes in absolute price levels.
- Notes:
- Print version record
- June 2020.
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