| Abstract: | In asymmetric buyer-supplier relationships, suppliers typically possess more information about the object of an exchange. To ameliorate customers' evaluation problems, suppliers use signals to promise the delivery of a certain quality level to the market. A commonly used supplier signal in asymmetric markets is the manner in which reputation is displayed to buyers. While the marketing literature recognizes the role of reputation in structuring such asymmetric buyer-supplier relationships, relatively little research effort has been directed at the conceptualization and measurement of suppliers' reputation display. To address this gap, I adopt an interdisciplinary perspective and conceptualize suppliers' reputation display as a multi-dimensional construct. Specifically, I argue that suppliers' reputation display represents a latent consisting of three distinct dimensions; (i) specific investments, (ii) advertising intensity, and (iii) certification. The preceding conceptualization implies that reputation display signals a suppliers' past and future conduct to the marketplace. For example, by displaying certification, suppliers expect the market to infer certain firm attributes based on past actions. Likewise, suppliers' investments in advertising and specific assets may provide a signal of future honest behavior to the marketplace. I empirically validate this three factor conceptualization of reputation display by utilizing the technique of Latent Variable Structural Equations Modeling (LVSE). Empirical tests conducted on data obtained from 287 automotive service managers via mail survey support the three factor model of reputation display. |
