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Persuasive and Informative Advertising: A Classroom Experiment

Author

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  • Beth A. Freeborn

    () (Department of Economics, College of William and Mary)

  • Jason P. Hulbert

    () (Department of Economics, College of William and Mary)

Abstract

This paper outlines a pair of classroom activities designed to provide an intuitive foundation to the theoretical introduction of advertising in monopoly markets. The roles of both informative and persuasive advertising are covered. Each student acts as a monopolist and chooses the number of (costly) advertisements and price. The experiments are intended for intermediate microeconomics or industrial organization courses, though may be utilized in any course that covers advertising models.

Suggested Citation

  • Beth A. Freeborn & Jason P. Hulbert, 2009. "Persuasive and Informative Advertising: A Classroom Experiment," Working Papers 85, Department of Economics, College of William and Mary.
  • Handle: RePEc:cwm:wpaper:85
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    File URL: http://economics.wm.edu/wp/cwm_wp85.pdf
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    References listed on IDEAS

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    1. C. Robert Clark, 2007. "Advertising Restrictions and Competition in the Children’s Breakfast Cereal Industry," Journal of Law and Economics, University of Chicago Press, vol. 50, pages 757-780.
    2. Cabral, Luis M. B., 2000. "Introduction to Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262032864, January.
    3. Tisha L. N. Emerson & Beck A. Taylor, 2004. "Comparing Student Achievement across Experimental and Lecture-Oriented Sections of a Principles of Microeconomics Course," Southern Economic Journal, Southern Economic Association, vol. 70(3), pages 672-693, January.
    4. Avinash Dixit & Victor Norman, 1978. "Advertising and Welfare," Bell Journal of Economics, The RAND Corporation, vol. 9(1), pages 1-17, Spring.
    5. Frank, Bjorn, 1997. "The Impact of Classroom Experiments on the Learning of Economics: An Empirical Investigation," Economic Inquiry, Western Economic Association International, vol. 35(4), pages 763-769, October.
    6. Mark Dickie, 2006. "Do Classroom Experiments Increase Learning in Introductory Microeconomics?," The Journal of Economic Education, Taylor & Francis Journals, vol. 37(3), pages 267-288, July.
    7. Oz Shy, 1996. "Industrial Organization: Theory and Applications," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262691795, January.
    8. Capra, C. Monica & Goeree, Jacob K. & Gomez, Rosario & Holt, Charles A., 2000. "Predation, asymmetric information and strategic behavior in the classroom: an experimental approach to the teaching of industrial organization," International Journal of Industrial Organization, Elsevier, vol. 18(1), pages 205-225, January.
    9. Ackerberg, Daniel A, 2001. "Empirically Distinguishing Informative and Prestige Effects of Advertising," RAND Journal of Economics, The RAND Corporation, vol. 32(2), pages 316-333, Summer.
    10. Yvonne Durham & Thomas Mckinnon & Craig Schulman, 2007. "Classroom Experiments: Not Just Fun And Games," Economic Inquiry, Western Economic Association International, vol. 45(1), pages 162-178, January.
    11. Atin Basuchoudhary & Christopher Metcalf & Kai Pommerenke & David Reiley & Christian Rojas & Marzena Rostek & James Stodder, 2008. "Price Discrimination and Resale: A Classroom Experiment," The Journal of Economic Education, Taylor & Francis Journals, vol. 39(3), pages 229-244, July.
    12. Rosenblat, Tanya, 2009. "Vertical Integration of Successive Monopolists: A Classroom Experiment," Staff General Research Papers Archive 13027, Iowa State University, Department of Economics.
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    Cited by:

    1. Correa, Manuel & García-Quero, Fernando & Ortega-Ortega, Marta, 2016. "A role-play to explain cartel behavior: Discussing the oligopolistic market," International Review of Economics Education, Elsevier, vol. 22(C), pages 8-15.

    More about this item

    Keywords

    Classroom experiment; Advertising; Monopolist; Undergraduate Industrial Organization;

    JEL classification:

    • A22 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Undergraduate
    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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