While the salespeople cannot unilaterally recommend other firms products, the firm as a whole can have a strategy of recommending the best product, and use that reputation to land more customers (the Miracle on 34th Street / Progressive insurance model)
It’s a hopeful story, but again I think this is a version of “in the best of all possible worlds”. Sure, if everybody is in a long-run repeated game, then anything can be an equilibrium, including all possible efficient outcomes. That might be possible sometimes, but we don’t see many firms pursuing a strategy of recommending their rivals’ products.
I frequently am allowed to leave shops without buying a product so atleast some baseline non-loyalty is around. “Neccesarily” is a possiblity claim so at that level inconvenient worlds are relevant.
If the situation is a long iteration game then the relevance of short iteration analyses can be questioned.
In theory a hyper-loyal seller might be tempted to give wrong change to a customer giving money in excess to agreed price. However in practise the PR fallout of trying to do anything like this is so great that they are forbidden from doing so on multiple levels. There are lots of situation where tribalism would be so abhorrent that we don’t even register it as a relevant possibility.
While the salespeople cannot unilaterally recommend other firms products, the firm as a whole can have a strategy of recommending the best product, and use that reputation to land more customers (the Miracle on 34th Street / Progressive insurance model)
It’s a hopeful story, but again I think this is a version of “in the best of all possible worlds”. Sure, if everybody is in a long-run repeated game, then anything can be an equilibrium, including all possible efficient outcomes. That might be possible sometimes, but we don’t see many firms pursuing a strategy of recommending their rivals’ products.
I frequently am allowed to leave shops without buying a product so atleast some baseline non-loyalty is around. “Neccesarily” is a possiblity claim so at that level inconvenient worlds are relevant.
If the situation is a long iteration game then the relevance of short iteration analyses can be questioned.
In theory a hyper-loyal seller might be tempted to give wrong change to a customer giving money in excess to agreed price. However in practise the PR fallout of trying to do anything like this is so great that they are forbidden from doing so on multiple levels. There are lots of situation where tribalism would be so abhorrent that we don’t even register it as a relevant possibility.