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The NPV of bad news
2007
International Journal of Research in Marketing
We explore the effects of individual-and network-level negative word-of-mouth on a firm's profits using an agent-based model, specifically an extended small-world analysis. We include both permanent strong ties within the social network, and changing, often random, weak ties with other networks. The effect of negative word-of-mouth on the Net Present Value (NPV) of the firm was found to be substantial, even when the initial number of dissatisfied customers is relatively small. We show that the
doi:10.1016/j.ijresmar.2007.02.003
fatcat:yrkvj6wx2zhnhn4igquywr6rnm