Discussion paper

DP15732 Collective Brand Reputation

We develop a theory of collective brand reputation for markets in which product quality is jointly determined by local and global players.
In a repeated game of imperfect public monitoring, we model collective branding as a pooling of quality signals generated in different markets. Such pooling yields a beneficial informativeness effect for the actions of a global player present in all markets, but also harmful free-riding by local, market-specific players. The resulting tradeoff yields a theory of optimal brand size and revenue sharing, applying to platform markets, franchising, licensing, umbrella branding, and firms with team production.


Nocke, V and R Strausz (2021), ‘DP15732 Collective Brand Reputation‘, CEPR Discussion Paper No. 15732. CEPR Press, Paris & London. https://cepr.org/publications/dp15732