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Advertising and the screening role of mass media

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Author Info
Kremhelmer, Susanne
Zenger, Hans

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Abstract

We argue that there exists a problem of adverse selection in the provision of advertising which makes it impossible to establish direct markets for it. The media are regarded as intermediaries that can channel advertising and allocate it efficiently by screening consumers. This role of media may result in excessive quality and prices of media products. These distortions will be more severe if consumers' quality preferences are relatively homogenous.

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File URL: http://www.sciencedirect.com/science/article/B6V8J-4R98K1W-1/1/39a5da45bcd3b6985538cc0daaa24694
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Publisher Info
Article provided by Elsevier in its journal Information Economics and Policy.

Volume (Year): 20 (2008)
Issue (Month): 2 (June)
Pages: 107-119
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Handle: RePEc:eee:iepoli:v:20:y:2008:i:2:p:107-119

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Web page: http://www.elsevier.com/locate/inca/505549

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