Targeted advertising and costly consumer search.
We study targeting of advertising based on information about the consumer's likely ranking of products. Firms send ads to more promising consumers. Thus, targeting increases the expected willingness to pay for the product the consumer learns about but also reduces the expected differentiation of the...
| Published in: | Economic Inquiry Vol. 61; no. 2; pp. 430 - 451 |
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| Main Authors: | , |
| Format: | Article |
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Wiley-Blackwell
Apr2023
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| Subjects: | |
| Online Access: | View this record in EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=162014038&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 162014038 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 00952583 EIQ jtl: Economic Inquiry issn: 00952583 maglogo: Y pubinfo: dt: Apr2023 vid: 61 iid: 2 pid: 480 pub: Wiley-Blackwell artinfo: ui: 162014038 10.1111/ecin.13124 ppf: 430 ppct: 21 formats: fmt: – @attributes: type: T – @attributes: type: C – @attributes: type: P size: 968KB tig: atl: Targeted advertising and costly consumer search. aug: au: Burguet, Roberto Petrikaitė, Vaiva affil: University of Central Florida, Orlando Florida,, USA Statistics Lithuania, Vilnius, Lithuania su: Advertising Consumers Consumer education Product differentiation Willingness to pay sug: subj: Advertising Consumers Consumer education Other Services Related to Advertising Outdoor Advertising Product differentiation Willingness to pay keyword: horizontal differentiation random advertising sequential search targeted advertising horizontal differentiation random advertising sequential search targeted advertising ab: We study targeting of advertising based on information about the consumer's likely ranking of products. Firms send ads to more promising consumers. Thus, targeting increases the expected willingness to pay for the product the consumer learns about but also reduces the expected differentiation of these products. The two effects push search, and so prices, in opposite direction. The first effect is more important for lower search costs. The second is stronger the larger the number of products. The improved selection under targeting increases firms' profitability and so advertising effort. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
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