Can consumer complaints reduce product reliability? Should we worry?

We analyze a monopolist’s pricing and product reliability problem when consumers are entitled to product replacement but have heterogeneous cost of exercising this right, and we assess the implications of a decrease in consumers’ claiming cost on reliability, profit, and welfare. We find that reduci...

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Detalles Bibliográficos
Autor principal: Coleff, Joaquín
Formato: Articulo Documento de trabajo
Lenguaje:Inglés
Publicado: 2013
Materias:
Ciencias Económicas
Economía
product reliability
consumer complaints
liability cost
warranty
Acceso en línea:http://sedici.unlp.edu.ar/handle/10915/127347
https://onlinelibrary.wiley.com/doi/10.1111/jems.12335
Aporte de:
SEDICI (UNLP) de Universidad Nacional de La Plata
id I19-R120-10915-127347
record_format dspace
institution Universidad Nacional de La Plata
institution_str I-19
repository_str R-120
collection SEDICI (UNLP)
language Inglés
topic Ciencias Económicas
Economía
product reliability
consumer complaints
liability cost
warranty
spellingShingle Ciencias Económicas
Economía
product reliability
consumer complaints
liability cost
warranty
Coleff, Joaquín
Can consumer complaints reduce product reliability? Should we worry?
topic_facet Ciencias Económicas
Economía
product reliability
consumer complaints
liability cost
warranty
description We analyze a monopolist’s pricing and product reliability problem when consumers are entitled to product replacement but have heterogeneous cost of exercising this right, and we assess the implications of a decrease in consumers’ claiming cost on reliability, profit, and welfare. We find that reducing consumers’ claiming cost may reduce reliability and increase profit. Additionally, the model can explain why some firms encourage consumers to complain while others discourage consumers from complaining. We also show that welfare and profit are partially aligned, specially when consumers’ claiming cost are relatively low and the firm prefers to promote complaints; consequently, we find that encouraging complaints will eventually increase welfare.
format Articulo
Documento de trabajo
author Coleff, Joaquín
author_facet Coleff, Joaquín
author_sort Coleff, Joaquín
title Can consumer complaints reduce product reliability? Should we worry?
title_short Can consumer complaints reduce product reliability? Should we worry?
title_full Can consumer complaints reduce product reliability? Should we worry?
title_fullStr Can consumer complaints reduce product reliability? Should we worry?
title_full_unstemmed Can consumer complaints reduce product reliability? Should we worry?
title_sort can consumer complaints reduce product reliability? should we worry?
publishDate 2013
url http://sedici.unlp.edu.ar/handle/10915/127347
https://onlinelibrary.wiley.com/doi/10.1111/jems.12335
work_keys_str_mv AT coleffjoaquin canconsumercomplaintsreduceproductreliabilityshouldweworry
bdutipo_str Repositorios
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