Working papers:
Brand Extension as Informational Leverage
Jay Pil Choi
Downloads:
- Title:
- Brand Extension as Informational Leverage
- Author(s):
- Choi, Jay Pil
- Date:
- 1997
- Type:
- Working papers
- Department:
- Economics
- Permanent URL:
- http://hdl.handle.net/10022/AC:P:15714
- Series:
- Department of Economics Discussion Papers
- Part Number:
- 9697-26
- Publisher:
- Department of Economics, Columbia University
- Publisher Location:
- New York
- Abstract:
- The marketing literature refers to the concept of brand capital and provides empirical evidence that firms with a large stock of well established brands have an advantage in introducing new products. This paper develops a theory of brand extension as a mechanism for informational leverage in which a firm leverages off a good's reputation in one market to alleviate the problem of informational asymmetry encountered in other markets. It is shown that brand extension help a multi product monopolist introduce new experience good with less price distortion. Thus, the paper provides a theoretical foundation for the concept of brand capital.
- Subject(s):
-
Marketing
Economic theory
- Item views:
- 252