The use of expert opinion, quality and reputation indicators by consumers: evidence from the French vaulting stallion semen market

Abstract

We build a model inspired by the standard hedonic approach developed by Rosen (1974) and completed by Landon and Smith (1997, 1998) to analyze the price of French vaulting stallion semen in 2004. We show that reputation, modeled as an endogenous factor, plays a less important role than information on true quality for the explanation of price dispersion. This result is explained by the fact that information on studhorses is not only available but also reliable, insofar as the quality of a stallion is stable over time, contrary to non durable products like wine or cigars. This explains also why consumers on this market do not use expert opinions to make their choices.