Resolving service quality uncertainty through word-of-mouth communication

People use various information sources to resolve service quality uncertainty. This paper focuses on word-of-mouth communication among mothers. We conduct a survey of mothers with children in kindergarten to determine whether they use information from their friends on the choice of kindergartens and children’s clinics. We identify the factors that influence mothers’ word-of-mouth communication. We find that younger and wealthier mothers use information from friends more frequently for the choice of children’s clinics. We also examine whether the behavior of mothers is influenced by the communication skills of other mothers in the classroom. We do not find network externalities in mothers’ word-of-mouth communication.