‘If you’re critical, you’re already out of the game.’ —Jeff Koons
This paper considers when a firm’s freely chosen name can signal meaningful information about its quality, and examines a setting in which it does.
Plumbing firms with names beginning with an “A” or a number receive five times 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 position auctions: plumbing firms that advertise on Google receive more complaints, which contradicts prior theoretical predictions but fits the setting considered here.
