Can consumer complaints reduce product reliability? Should we worry?

Autores
Coleff, Joaquín
Año de publicación
2013
Idioma
inglés
Tipo de recurso
documento de trabajo
Estado
versión enviada
Descripción
We analyze a monopolist’s pricing and product reliability problem when consumers are entitled to product replacement but have heterogeneous cost of exercising this right, and we assess the implications of a decrease in consumers’ claiming cost on reliability, profit, and welfare. We find that reducing consumers’ claiming cost may reduce reliability and increase profit. Additionally, the model can explain why some firms encourage consumers to complain while others discourage consumers from complaining. We also show that welfare and profit are partially aligned, specially when consumers’ claiming cost are relatively low and the firm prefers to promote complaints; consequently, we find that encouraging complaints will eventually increase welfare.
Facultad de Ciencias Económicas
Materia
Ciencias Económicas
Economía
product reliability
consumer complaints
liability cost
warranty
Nivel de accesibilidad
acceso abierto
Condiciones de uso
http://creativecommons.org/licenses/by-nc-nd/4.0/
Repositorio
SEDICI (UNLP)
Institución
Universidad Nacional de La Plata
OAI Identificador
oai:sedici.unlp.edu.ar:10915/127347
Acceder
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oai_identifier_str oai:sedici.unlp.edu.ar:10915/127347
network_acronym_str SEDICI
repository_id_str 1329
network_name_str SEDICI (UNLP)
spelling Can consumer complaints reduce product reliability? Should we worry?Coleff, JoaquínCiencias EconómicasEconomíaproduct reliabilityconsumer complaintsliability costwarrantyWe analyze a monopolist’s pricing and product reliability problem when consumers are entitled to product replacement but have heterogeneous cost of exercising this right, and we assess the implications of a decrease in consumers’ claiming cost on reliability, profit, and welfare. We find that reducing consumers’ claiming cost may reduce reliability and increase profit. Additionally, the model can explain why some firms encourage consumers to complain while others discourage consumers from complaining. We also show that welfare and profit are partially aligned, specially when consumers’ claiming cost are relatively low and the firm prefers to promote complaints; consequently, we find that encouraging complaints will eventually increase welfare.Facultad de Ciencias Económicas2013-12info:eu-repo/semantics/workingPaperinfo:eu-repo/semantics/submittedVersionDocumento de trabajohttp://purl.org/coar/resource_type/c_8042info:ar-repo/semantics/documentoDeTrabajoapplication/pdfhttp://sedici.unlp.edu.ar/handle/10915/127347enginfo:eu-repo/semantics/altIdentifier/url/https://onlinelibrary.wiley.com/doi/10.1111/jems.12335info:eu-repo/semantics/altIdentifier/issn/1058-6407info:eu-repo/semantics/altIdentifier/issn/1530-9134info:eu-repo/semantics/altIdentifier/doi/10.1111/jems.12335info:eu-repo/semantics/openAccesshttp://creativecommons.org/licenses/by-nc-nd/4.0/Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0)reponame:SEDICI (UNLP)instname:Universidad Nacional de La Platainstacron:UNLP2025-10-22T17:11:37Zoai:sedici.unlp.edu.ar:10915/127347Institucionalhttp://sedici.unlp.edu.ar/Universidad públicaNo correspondehttp://sedici.unlp.edu.ar/oai/snrdalira@sedici.unlp.edu.arArgentinaNo correspondeNo correspondeNo correspondeopendoar:13292025-10-22 17:11:37.53SEDICI (UNLP) - Universidad Nacional de La Platafalse
dc.title.none.fl_str_mv Can consumer complaints reduce product reliability? Should we worry?
title Can consumer complaints reduce product reliability? Should we worry?
spellingShingle Can consumer complaints reduce product reliability? Should we worry?
Coleff, Joaquín
Ciencias Económicas
Economía
product reliability
consumer complaints
liability cost
warranty
title_short Can consumer complaints reduce product reliability? Should we worry?
title_full Can consumer complaints reduce product reliability? Should we worry?
title_fullStr Can consumer complaints reduce product reliability? Should we worry?
title_full_unstemmed Can consumer complaints reduce product reliability? Should we worry?
title_sort Can consumer complaints reduce product reliability? Should we worry?
dc.creator.none.fl_str_mv Coleff, Joaquín
author Coleff, Joaquín
author_facet Coleff, Joaquín
author_role author
dc.subject.none.fl_str_mv Ciencias Económicas
Economía
product reliability
consumer complaints
liability cost
warranty
topic Ciencias Económicas
Economía
product reliability
consumer complaints
liability cost
warranty
dc.description.none.fl_txt_mv We analyze a monopolist’s pricing and product reliability problem when consumers are entitled to product replacement but have heterogeneous cost of exercising this right, and we assess the implications of a decrease in consumers’ claiming cost on reliability, profit, and welfare. We find that reducing consumers’ claiming cost may reduce reliability and increase profit. Additionally, the model can explain why some firms encourage consumers to complain while others discourage consumers from complaining. We also show that welfare and profit are partially aligned, specially when consumers’ claiming cost are relatively low and the firm prefers to promote complaints; consequently, we find that encouraging complaints will eventually increase welfare.
Facultad de Ciencias Económicas
description We analyze a monopolist’s pricing and product reliability problem when consumers are entitled to product replacement but have heterogeneous cost of exercising this right, and we assess the implications of a decrease in consumers’ claiming cost on reliability, profit, and welfare. We find that reducing consumers’ claiming cost may reduce reliability and increase profit. Additionally, the model can explain why some firms encourage consumers to complain while others discourage consumers from complaining. We also show that welfare and profit are partially aligned, specially when consumers’ claiming cost are relatively low and the firm prefers to promote complaints; consequently, we find that encouraging complaints will eventually increase welfare.
publishDate 2013
dc.date.none.fl_str_mv 2013-12
dc.type.none.fl_str_mv info:eu-repo/semantics/workingPaper
info:eu-repo/semantics/submittedVersion
Documento de trabajo
http://purl.org/coar/resource_type/c_8042
info:ar-repo/semantics/documentoDeTrabajo
format workingPaper
status_str submittedVersion
dc.identifier.none.fl_str_mv http://sedici.unlp.edu.ar/handle/10915/127347
url http://sedici.unlp.edu.ar/handle/10915/127347
dc.language.none.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv info:eu-repo/semantics/altIdentifier/url/https://onlinelibrary.wiley.com/doi/10.1111/jems.12335
info:eu-repo/semantics/altIdentifier/issn/1058-6407
info:eu-repo/semantics/altIdentifier/issn/1530-9134
info:eu-repo/semantics/altIdentifier/doi/10.1111/jems.12335
dc.rights.none.fl_str_mv info:eu-repo/semantics/openAccess
http://creativecommons.org/licenses/by-nc-nd/4.0/
Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0)
eu_rights_str_mv openAccess
rights_invalid_str_mv http://creativecommons.org/licenses/by-nc-nd/4.0/
Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0)
dc.format.none.fl_str_mv application/pdf
dc.source.none.fl_str_mv reponame:SEDICI (UNLP)
instname:Universidad Nacional de La Plata
instacron:UNLP
reponame_str SEDICI (UNLP)
collection SEDICI (UNLP)
instname_str Universidad Nacional de La Plata
instacron_str UNLP
institution UNLP
repository.name.fl_str_mv SEDICI (UNLP) - Universidad Nacional de La Plata
repository.mail.fl_str_mv alira@sedici.unlp.edu.ar
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score 12.982451

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