“‘A’ Business by Any Other Name: Firm Name Choice As a Signal of Firm Quality”, 2014-08 ():
This paper considers when a firm’s deliberately chosen name can signal meaningful information about its quality, focusing specifically on a setting in which it does:
plumbing firms with names that begin with an “A” or a number receive 5× more service complaints, on average. In addition, firms use names beginning with an “A” or a number more often in larger markets, and those that do have higher prices.
These results reflect consumers’ search decisions and extend to online platforms: plumbing firms that advertise on Google receive more complaints, which contradicts prior theoretical predictions but fits the setting considered here.
[Keywords: reputation, names, position auctions]