Posted: 29 Aug 2010 Last revised: 29 Jun 2015
Date Written: June 2013
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
Suggested Citation: Suggested Citation
McDevitt, Ryan C., 'A' Business by Any Other Name: Firm Name Choice as a Signal of Firm Quality (June 2013). Available at SSRN: https://ssrn.com/abstract=1667550 or http://dx.doi.org/10.2139/ssrn.1667550