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Consumer Privacy and Marketing Avoidance

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Author Info
Il-Horn Hann (University of Southern California)
Kai-Lung Hui (National University of Singapore)
Sang-Yong Tom Lee (Hanyang University)
Ivan Png (National University of Singapore)

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Abstract

We introduce consumer avoidance into analytical marketing research. We show that consumer efforts to conceal themselves and to deflect marketing have a crucial impact on sellers¡¯ marketing strategy. Under reasonable conditions, seller marketing is a strategic complement with consumer concealment. Hence, consumer measures to conceal themselves from marketing will increase its cost-effectiveness and lead sellers to market more. Policies that encourage consumers to conceal their identities would lead sellers to increase marketing. By contrast, policies that encourage consumers to deflect seller marketing would lead sellers to reduce marketing. Further, there is a clear need for public policy. To the extent of the externality from the sellers to consumers, the equilibrium levels of marketing (chosen by sellers) and concealment and deflection (chosen by consumers) exceed the social optimum.

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File URL: http://129.3.20.41/eps/io/papers/0503/0503009.pdf
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Paper provided by EconWPA in its series Industrial Organization with number 0503009.

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Length: 27 pages
Date of creation: 25 Mar 2005
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Handle: RePEc:wpa:wuwpio:0503009

Note: Type of Document - pdf; pages: 27
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Web page: http://129.3.20.41

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References listed on IDEAS
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.:
  1. Bulow, Jeremy I & Geanakoplos, John D & Klemperer, Paul D, 1985. "Multimarket Oligopoly: Strategic Substitutes and Complements," Journal of Political Economy, University of Chicago Press, vol. 93(3), pages 488-511, June. [Downloadable!] (restricted)
  2. Il-Horn Hann & Kai-Lung Hui & Sang-Yong Tom Lee & Ivan P.L. Png, 2005. "Sales and Promotions: A More General Model," Industrial Organization 0508014, EconWPA. [Downloadable!]
  3. McAfee R. Preston, 1994. "Endogenous Availability, Cartels, and Merger in an Equilibrium Price Dispersion," Journal of Economic Theory, Elsevier, vol. 62(1), pages 24-47, February. [Downloadable!] (restricted)
  4. Grossman, Gene M & Shapiro, Carl, 1984. "Informative Advertising with Differentiated Products," Review of Economic Studies, Blackwell Publishing, vol. 51(1), pages 63-81, January. [Downloadable!] (restricted)
  5. Michael R. Baye & John Morgan, 2001. "Information Gatekeepers on the Internet and the Competitiveness of Homogeneous Product Markets," American Economic Review, American Economic Association, vol. 91(3), pages 454-474, June. [Downloadable!] (restricted)
  6. Varian, Hal R, 1980. "A Model of Sales," American Economic Review, American Economic Association, vol. 70(4), pages 651-59, September. [Downloadable!] (restricted)
  7. Narasimhan, Chakravarthi, 1988. "Competitive Promotional Strategies," Journal of Business, University of Chicago Press, vol. 61(4), pages 427-49, October. [Downloadable!] (restricted)
  8. Butters, Gerard R, 1977. "Equilibrium Distributions of Sales and Advertising Prices," Review of Economic Studies, Blackwell Publishing, vol. 44(3), pages 465-91, October. [Downloadable!] (restricted)
  9. Ioana Chioveanu, 2005. "Advertising, Brand Loyalty And Pricing," Working Papers. Serie AD 2005-32, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
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  1. Kai-Lung Hui & I.P.L. Png, 2005. "The Economics of Privacy," Industrial Organization 0505007, EconWPA, revised 29 Aug 2005. [Downloadable!]
  2. Simon P. Anderson & André de Palma, 2006. "Information Congestion," Virginia Economics Online Papers 364, University of Virginia, Department of Economics. [Downloadable!]
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