Collective Reputation Effects: An Empirical Appraisal

16 Pages Posted: 14 Nov 2010 Last revised: 28 Jun 2012

See all articles by Olivier Gergaud

Olivier Gergaud

Kedge - Bordeaux Business School

Florine Livat

BEM Bordeaux Management School; KEDGE Business School

Frederic Warzynski

Aarhus University - Department of Economics

Date Written: May 31, 2012

Abstract

This paper tests Tirole (1996)’s theory about the link between individual and collective reputation. We estimate an interaction model in which a single collective reputation both determines and is determined by a series of individual reputations. Using detailed survey data about the image of Bordeaux wines in seven European countries, we find positive and significant spillover effects from the umbrella reputation (Bordeaux) that moreover increase with the individual reputation level of the wine. Controlling for the natural endogeneity of collective reputation in this setup, allows to capture the important fact that this relationship is faced with marginal diminishing returns. In other words that the marginal impact of Bordeaux as an umbrella brand actually tends to decrease to zero (and not to increase in a linear way) as the reputation level of its entities goes up. These spillover effects, when significantly positive, vary from a minimum of 5% to a maximum of 15% of additional favorable quality opinions.

Keywords: Individual Reputation, Collective Reputation, Bordeaux Wines

JEL Classification: L15, L66, Z13

Suggested Citation

Gergaud, Olivier and Livat, Florine and Warzynski, Frederic, Collective Reputation Effects: An Empirical Appraisal (May 31, 2012). Available at SSRN: https://ssrn.com/abstract=1708464 or http://dx.doi.org/10.2139/ssrn.1708464

Olivier Gergaud (Contact Author)

Kedge - Bordeaux Business School ( email )

Domaine de Luminy - BP 921
BP 921
Marseille, PACA 13288
France

Florine Livat

BEM Bordeaux Management School ( email )

Bordeaux (Talence)
France

HOME PAGE: http://www.kedgebs.com

KEDGE Business School ( email )

Domaine de Luminy - BP 921
BP 921
Marseille, PACA 13288
France

Frederic Warzynski

Aarhus University - Department of Economics ( email )

hermodsvej 22
DK-8230 Åbyhøj
Denmark
+45 89 48 61 95 (Phone)

HOME PAGE: http://www.hha.dk/~fwa/frederic.htm

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