| Author: | Moorthy, S. Srinivasan, K. |
| Title: | Signaling quality with a money-back guarantee: the role of transaction costs |
| Journal: | Marketing Science
1995 : VOL. 14:4, p. 442-466 |
| Index terms: | SIGNALING QUALITY TRANSACTION COSTS MONEY |
| Language: | eng |
| Abstract: | Direct marketing is witnessing explosive growth. As consumers increasingly purchase products from their homes, their ability to judge the quality of products they buy is significantly reduced. In this paper the authors study how money-back guarantees can signal product quality in such environments. they interpret product quality broadly to mean both the level of attributes promised as well as the firm's consistency in delivery on those promises. Key aspects of this formulation are the explicit consideration of transaction costs, and alternative signals of product quality. |
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