Dynamic informative advertising of new experience goods:
AbstractThis paper analyzes the optimal informative advertising and price policies of a monopolist who sells a new experience good over time to a population of heterogeneous buyers. Under certain conditions, the advertising rate first increases and then decreases over the marketing cycle with a peak occurring at the end of the introductory period when prices are low. Advertising lowers introductory prices but also shortens the period during which they are offered. Advertising raises the share of consumers who know their valuation in the long-run but not necessarily in the short-run
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Bibliographic InfoPaper provided by International Food Policy Research Institute (IFPRI) in its series IFPRI discussion papers with number 1062.
Date of creation: 2011
Date of revision:
Advertising; experience goods; Learning; monopoly; private information;
Other versions of this item:
- Alexander E. Saak, 2012. "Dynamic Informative Advertising of New Experience Goods," Journal of Industrial Economics, Wiley Blackwell, vol. 60(1), pages 104-135, 03.
- Saak, Alexander E., 2010. "Dynamic Informative Advertising of New Experience Goods," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61326, Agricultural and Applied Economics Association.
- Saak, Alexander E., 2011. "Dynamic Informative Advertising of New Experience Goods," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103536, Agricultural and Applied Economics Association.
- NEP-ALL-2011-03-19 (All new papers)
- NEP-COM-2011-03-19 (Industrial Competition)
- NEP-CTA-2011-03-19 (Contract Theory & Applications)
- NEP-MKT-2011-03-19 (Marketing)
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