'A' Business by Any Other Name: Firm Name Choice as a Signal of Firm Quality
Ryan C. McDevitt
Fuqua Graduate School of Business - Duke University; Duke Innovation & Entrepreneurship Initiative
This paper considers when a firm's deliberately chosen name can signal meaningful information about its quality, focusing specifically on a setting in which it does: plumbing firms with names that begin with an "A" or a number receive five times more service complaints, on average. In addition, firms use names beginning with an "A" or a number more often in larger markets, and those that do have higher prices. These results reflect consumers' search decisions and extend to online platforms: plumbing firms that advertise on Google receive more complaints, which contradicts prior theoretical predictions but fits the setting considered here.
Keywords: Reputation, Names, Position Auctions
JEL Classification: L10, L14, L15
Date posted: August 29, 2010 ; Last revised: June 29, 2015