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- W2034950004 abstract "This paper demonstrates that word-of-mouth communication between consumers provides a mechanism to support signalling. Particularly, a separating equilibrium can be supported where a low introductory price signals high quality. The equilibrium price path is qualitatively similar to that supported by repeat buying. Separation is less likely than in repeat buying because word-of-mouth communication between consumers is likely to be less effective in transmitting information than repeat buying. The equivalence of word-of-mouth communication and repeat buying breaks down entirely when communication is costly because consumers then have a strict incentive not to communicate if separation occurs. This undermines the mechanism that supports the separation." @default.
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- W2034950004 title "Word-of-Mouth Communication and Price as a Signal of Quality" @default.
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- W2034950004 doi "https://doi.org/10.1111/j.1475-4932.1994.tb01856.x" @default.
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