Reputation Systems and Brands
By Arnold Kling
The single biggest explanation for fragile brands is the swelling strength of the consumer. We’ve seen a pronounced jump in the amount of information available about goods and services. It’s not just bellwethers like Consumers Union and J.D. Power, established authorities that unquestionably shape people’s buying decisions, but also the crush of magazines, Web sites, and message boards scrutinizing products.
This reinforces my belief that we can reduce the significance of the “brand” of government licenses. Alternative reputation systems could provide a substitute, particularly in the case of health care providers. I believe that this would lower costs and speed innovation in the health care industry.
For Discussion. How strong is the evidence that reputation systems are eroding the power of brands?