Market research and complementary advertising under asymmetric information
AbstractWe consider whether market research can always increase a seller's sales under bilateral asymmetric information. If a monopoly seller provides a high quality object, market research cannot increase sales even when the cost is sufficiently low. A low quality seller, on the other hand, can likely benefit from market research. However, this research has shown that market research alone does not improve sales and that advertising complements market research. Thus the high quality seller can increase sales by using both methods. The availability of advertising and market research to both types of seller results in disappearance of information asymmetry and efficient trade.
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Bibliographic InfoPaper provided by Graduate School of Economics, Hitotsubashi University in its series Discussion Papers with number 2008-05.
Length: 27 p.
Date of creation: May 2008
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-05-09 (All new papers)
- NEP-COM-2009-05-09 (Industrial Competition)
- NEP-CTA-2009-05-09 (Contract Theory & Applications)
- NEP-MKT-2009-05-09 (Marketing)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Moraga-Gonzalez, Jose Luis, 2000.
"Quality uncertainty and informative advertising,"
International Journal of Industrial Organization,
Elsevier, vol. 18(4), pages 615-640, May.
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