Several explanations of the purpose for consumer
product warranties can be found in the marketing
literature. However, comparatively little research has been
done to develop and test a theory of the consumer product
warranty. Recently the Market Signal Theory which posits
that warranties serve as signals of product reliabil ity, has
emerged in the economic, legal, and marketing literature.
In this article, a test of the Market Signal Theory is
conducted using pre- and post-Magnuson-Moss Act
warranties. Marketing and public policy implications of
the Market Signal Theory and directions for future
research are also discussed.
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