Who Posts the Reputational Bond? Advertising and Cobranding in Vertical Relationships
33 Pages Posted: 11 Mar 2012
Date Written: March 6, 2012
Abstract
I identify and explore the relationship between two views of brands and advertising, one emphasizing their role in assuring quality and the other emphasizing their role in shifting rents across firms in the supply chain. I show that in the presence of moral hazard, the identity of the reputational bondposter matters, and that both the upstream and the downstream prefer to be the bondposter. I determine the welfare costs of bondposter identity, and who would pay more (or be willing to advertise more) to become the bondposter.
Keywords: Cobranding, Reputation, Intel Inside
Suggested Citation: Suggested Citation
Johnson, Justin, Who Posts the Reputational Bond? Advertising and Cobranding in Vertical Relationships (March 6, 2012). Available at SSRN: https://ssrn.com/abstract=2018936 or http://dx.doi.org/10.2139/ssrn.2018936
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