It’s a fundamental tenet of marketing: Consumers believe, on some level, that using a prestigious brand enhances their own image, so they’re willing to pay more for one. Similarly, executives like to be linked with employers that have well-known brands—and it turns out that they’re willing to “pay” for the association by accepting substantially lower compensation.
A version of this article appeared in the July–August 2015 issue (p.24) of Harvard Business Review.