Published research has shown that an alliance with a well-known, reputable brand can improve quality perceptions of a previously unknown focal brand. Much of this research is based on signaling theory's bonding hypothesis. However, customers face information search costs when evaluating brands with which they may be unfamiliar. The authors contend that, since consumers are self-interested, they will prefer to realize cost savings for themselves relative to a future conditional opportunity to punish a false signal sender. Three studies show that the effect of brand ally information on quality perceptions of an unfamiliar brand is mediated by perceived risk reduction due to lower information search costs.
