Willingness to Pay for Firm Reputation: Paying for Risk Rating in the Annuity Market

  title={Willingness to Pay for Firm Reputation: Paying for Risk Rating in the Annuity Market},
  author={Pilar Alcalde and Bernardita Vial},
In this paper we test the existence of a reputation premium in the context of the annuity market in Chile. This market provides an exceptionally good setting to measure consumers’ willingness to pay: retirees choose between a set of offers that vary only in the quote and the risk rating –a measure of the firm’s solvency– within each class of product. We find that willingness to pay for the reputation linked to the firm’s risk rating is statistically and economically significant. We also find a… 

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