American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Exit, Tweets, and Loyalty
American Economic Journal: Microeconomics
vol. 13,
no. 2, May 2021
(pp. 68–112)
Abstract
Hirschman's Exit, Voice, and Loyalty highlights the role of "voice" when individuals confront an unexpected deterioration in quality. Yet, voice has received little attention. To motivate our empirical analysis, we develop a simple model of voice as the equilibrium of a relational contract between customers and firms. We use data on 4 million tweets to or about US airlines to study the relationship between quality, voice, and market structure. Voice increases when quality deteriorates. This relationship is greater for airlines that operate a large share of flights in a market. Supplemental analyses support a relational contracting role for voice.Citation
Gans, Joshua S., Avi Goldfarb, and Mara Lederman. 2021. "Exit, Tweets, and Loyalty." American Economic Journal: Microeconomics, 13 (2): 68–112. DOI: 10.1257/mic.20180085Additional Materials
JEL Classification
- D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
- L15 Information and Product Quality; Standardization and Compatibility
- L82 Entertainment; Media
- L93 Air Transportation
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