Experimental evidence on advertising and price competition
AbstractTheory (Du, 2008) predicts that equilibrium prices will be lower when firms' advertising conveys the price than when it does not convey the price. In the laboratory sessions, sellers make two decisions: what price to set, and whether to advertise to eliminate consumer search costs for their product. The two experimental conditions are (1) advertising the price, or (2) advertising before pricing. Data from ten sessions indicate that, as predicted, firms choose more often to advertise when advertising conveys price, and prices in the second treatment are significantly higher than prices in the first treatment.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Taylor and Francis Journals in its journal New Zealand Economic Papers.
Volume (Year): 43 (2009)
Issue (Month): 2 ()
Contact details of provider:
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.