Institute of Economics University of Copenhagen Reciprocity , Socia in Markets
نویسندگان
چکیده
Reciprocal customers may disproportionately improve the performance of markets for experience goods. Reciprocal customers reward (punish) rms for providing good (bad) quality by upholding (terminating) the customer relation. This may induce rms to provide good quality which, in turn, may induce a positive externality for nonreciprocal customers who would, in the absence of reciprocal types, face market breakdown. This e¢ ciency-enhancing e¤ect of reciprocity is boosted when there are social ties between consumers and competition between rms. The existence of social ties or competition alone does not improve market performance. Keywords: Social networks, reputation, reciprocity, experience goods, customer loyalty. JEL classi cation: D43, L14, Z13. We gratefully acknowledge nancial support from the Russell Sage Foundation, the GFF-Fonds under Project no. G02110108 and from the Economic and Social Research Council via ELSE. Corresponding author: Jean-Robert Tyran, Studiestraede 6, DK-1455 Copenhagen, [email protected]
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