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Store Environment and Advertising. Investigating Two Manipulative Forces from the Supermarket

Author

Listed:
  • Joeri Clochet
  • Sam Cosaert
  • Laurens Cherchye
  • Bram De Rock

Abstract

We compare two manipulative forces from our daily shopping environment: store environment and advertising. Deviating from existing studies in the literature, we isolate store environment and advertising by using a simple experimental design, and we use a revealed preference methodology for analyzing (rational) consumer behavior. In a first step, we confirm that both forces positively impact on the expenditures for the promoted good. In a second step, we use a revealed preference methodology to investigate whether these manipulating forces have an distortive effect on consumer behavior. Our experiment suggests that respondents effectively tend to behave more irrational when subject to these forces, i.e. they spend more money for less utility. More generally, our paper motivates the use of revealed preference methodology in combination with specifically targeted experiments to address questions related to marketing influences on (rational) consumer behavior.

Suggested Citation

  • Joeri Clochet & Sam Cosaert & Laurens Cherchye & Bram De Rock, 2010. "Store Environment and Advertising. Investigating Two Manipulative Forces from the Supermarket," Review of Business and Economic Literature, KU Leuven, Faculty of Economics and Business, Review of Business and Economic Literature, vol. 0(1), pages 90-106.
  • Handle: RePEc:ete:revbec:20100105
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    Keywords

    store environment; advertising; rational consumer behavior; revealed preferences; GARP;

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising

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