Martin, SimonShelegia, Sandro2025-05-212025-05-212021Martin S, Shelegia S. Underpromise and overdeliver? Online product reviews and firm pricing. Int J Ind Organ. 2021;79:102775. DOI: 10.1016/j.ijindorg.2021.1027750167-7187http://hdl.handle.net/10230/70446We consider a signaling model capturing the introductory and the mature phase of a product. Information concerning product quality is transmitted between consumers through reviews, which partially depend on the expectations consumers had prior to their purchase. When future sales are sufficiently important, a novel tension arises: High-quality types may want to underpromise and overdeliver by imitating low types in order to get a better review. We show the existence of a Pareto-improving separating equilibrium. Both more informative reviews and price transparency can lead to higher prices. Our analysis reveals a new rationale for loss-leadership.application/pdfeng© Elsevier http://dx.doi.org/10.1016/j.ijindorg.2021.102775info:eu-repo/semantics/article2025-05-21http://dx.doi.org/10.1016/j.ijindorg.2021.102775Quality signalingConsumer reviewsReputationLoss leadershipinfo:eu-repo/semantics/openAccess