Exit, Tweets and Loyalty

75 Pages Posted: 17 Jan 2017

See all articles by Joshua S. Gans

Joshua S. Gans

University of Toronto - Rotman School of Management; NBER

Avi Goldfarb

University of Toronto - Rotman School of Management

Mara Lederman

University of Toronto - Rotman School of Management

Multiple version iconThere are 2 versions of this paper

Date Written: January 2017

Abstract

Hirschman’s Exit, Voice, and Loyalty highlights the role of “voice” in disciplining firms for low quality. We develop a formal model of voice as a relational contact between firms and consumers and show that voice is more likely to emerge in concentrated markets. We test this model using data on tweets to major U.S. airlines. We find that tweet volume increases when quality – measured by on-time performance – deteriorates, especially when the airline operates a large share of the flights in a market. We also find that airlines are more likely to respond to tweets from consumers in such markets.

Suggested Citation

Gans, Joshua S. and Goldfarb, Avi and Lederman, Mara, Exit, Tweets and Loyalty (January 2017). NBER Working Paper No. w23046. Available at SSRN: https://ssrn.com/abstract=2900051

Joshua S. Gans (Contact Author)

University of Toronto - Rotman School of Management ( email )

Canada

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

NBER ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Avi Goldfarb

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada
416-946-8604 (Phone)
416-978-5433 (Fax)

Mara Lederman

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

Register to save articles to
your library

Register

Paper statistics

Downloads
12
Abstract Views
482
PlumX Metrics