Valuing Brand Collaboration: Evidence From a Natural Experiment

42 Pages Posted: 7 Mar 2019 Last revised: 17 Mar 2019

See all articles by Yewon Kim

Yewon Kim

University of Chicago - Booth School of Business

Sanjog Misra

University of Chicago - Booth School of Business

Bradley Shapiro

University of Chicago - Booth School of Business

Date Written: March 14, 2019

Abstract

We study how brand impacts consumer demand in the context of museum memberships in a U.S. metropolitan city. Over the course of our sample, one major museum with a highly recognized brand closed. During the closure, it sequentially co-branded with two established local museums. The closure and collaboration events, combined with individual panel data on museum memberships, allow us to measure how these changes in brand affect demand. Collaboration with the closed museum lifts demand for the partner museum; however, this aggregate increase masks two counter-acting forces. First, customers with no history of buying membership from either museum enter the market, consistent with the prominent brand providing a signal of vertical quality. Second, a sub-group of customers who previously purchased from either or both of the museums display decreased demand. This is consistent with a model of brand providing information about horizontal match value, with decreasing demand from the broadening of brand being an example of brand dilution. The magnitude of these offsetting forces varies between collaboration events. These results have implications for the treatment of brand intercepts in counterfactuals when studying consumer demand.

Keywords: Branding, Demand Estimation, Co-Branding, Brand Collaboration, Fine Arts

JEL Classification: L22, L24, L40, L82, M31, C53, C54

Suggested Citation

Kim, Yewon and Misra, Sanjog and Shapiro, Bradley, Valuing Brand Collaboration: Evidence From a Natural Experiment (March 14, 2019). Available at SSRN: https://ssrn.com/abstract=3335833 or http://dx.doi.org/10.2139/ssrn.3335833

Yewon Kim (Contact Author)

University of Chicago - Booth School of Business ( email )

Sanjog Misra

University of Chicago - Booth School of Business ( email )

5807 South Woodlawn Avenue
Chicago, IL 60637
United States

Bradley Shapiro

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

HOME PAGE: http://faculty.chicagobooth.edu/bradley.shapiro/

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