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Uninformative Advertising as an Invitation to Search

Author

Listed:
  • Dina Mayzlin

    () (Yale University, New Haven, Connecticut 06520)

  • Jiwoong Shin

    () (Yale University, New Haven, Connecticut 06520)

Abstract

What the firm should say in an advertising message, the choice of content , is a critical managerial decision. Here, we focus on a particular aspect of the advertising content choice: an attribute-focused appeal versus an appeal with no direct information on product attributes. We make two assumptions that capture the reality of the advertising context. First, we assume that the bandwidth of advertising is limited: a firm can only communicate about a limited number of attributes. Second, we assume that consumers are active: they can choose to engage in a costly search to obtain additional product-related information. In this setting, we show that there exists an equilibrium where the high-quality firm chooses to produce messages devoid of any attribute information in order to invite the consumer to engage in search, which is likely to uncover positive information about the product. Whereas most of the previous literature has focused on the decision to advertise as a signal of quality, we show that message content, coupled with consumer search, can also serve as a credible signal of quality. In an extension, we show that our results are robust to endogenizing the firm's decision on the amount of advertising spending.

Suggested Citation

  • Dina Mayzlin & Jiwoong Shin, 2011. "Uninformative Advertising as an Invitation to Search," Marketing Science, INFORMS, vol. 30(4), pages 666-685, July.
  • Handle: RePEc:inm:ormksc:v:30:y:2011:i:4:p:666-685
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    File URL: http://dx.doi.org/10.1287/mksc.1110.0651
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Alexandre de Cornière, 2013. "Search Advertising," Economics Series Working Papers 649, University of Oxford, Department of Economics.
    2. repec:eee:indorg:v:56:y:2018:i:c:p:26-48 is not listed on IDEAS
    3. Baojun Jiang & Kinshuk Jerath & Kannan Srinivasan, 2011. "Firm Strategies in the "Mid Tail" of Platform-Based Retailing," Marketing Science, INFORMS, vol. 30(5), pages 757-775, September.
    4. repec:eee:joinma:v:30:y:2015:i:c:p:46-55 is not listed on IDEAS
    5. repec:kap:qmktec:v:13:y:2015:i:2:d:10.1007_s11129-015-9155-0 is not listed on IDEAS
    6. Liang Guo & Yue Wu, 2016. "Consumer deliberation and quality signaling," Quantitative Marketing and Economics (QME), Springer, vol. 14(3), pages 233-269, September.
    7. Randall Lewis & Dan Nguyen, 2015. "Display advertising’s competitive spillovers to consumer search," Quantitative Marketing and Economics (QME), Springer, vol. 13(2), pages 93-115, June.
    8. Suzuki, Toru, 2016. "Reminder game: Indirectness in persuasion," Games and Economic Behavior, Elsevier, vol. 100(C), pages 240-256.
    9. Yuanfang Lin & Amit Pazgal, 2016. "Hide Supremacy or Admit Inferiority—Market Entry Strategies in Response to Consumer Informational Needs," Customer Needs and Solutions, Springer;Institute for Sustainable Innovation and Growth (iSIG), vol. 3(2), pages 94-103, June.
    10. Belleflamme,Paul & Peitz,Martin, 2015. "Industrial Organization," Cambridge Books, Cambridge University Press, number 9781107687899, March.
    11. Roberto Burguet & Vaiva Petrikaite, 2017. "Targeted Advertising and Costly Consumer Search," Working Papers 971, Barcelona Graduate School of Economics.
    12. Simon P. Anderson & Régis Renault, 2013. "The Advertising Mix for a Search Good," Management Science, INFORMS, vol. 59(1), pages 69-83, April.
    13. repec:bla:jindec:v:64:y:2016:i:4:p:773-807 is not listed on IDEAS
    14. Dina Mayzlin & Yaniv Dover & Judith A. Chevalier, 2012. "Promotional Reviews: An Empirical Investigation of Online Review Manipulation," NBER Working Papers 18340, National Bureau of Economic Research, Inc.
    15. Archishman Chakraborty & Rick Harbaugh, 2012. "Persuasive Puffery," Working Papers 2012-05, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
    16. Alexandre de Cornière, 2016. "Search Advertising," American Economic Journal: Microeconomics, American Economic Association, vol. 8(3), pages 156-188, August.
    17. repec:eee:indorg:v:57:y:2018:i:c:p:225-254 is not listed on IDEAS
    18. Fershtman, Chaim & Fishman, Arthur & Zhou, Jidong, 2018. "Search and categorization," International Journal of Industrial Organization, Elsevier, vol. 57(C), pages 225-254.
    19. repec:eee:jouret:v:93:y:2017:i:3:p:382-399 is not listed on IDEAS

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