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Targeted advertising and costly consumer search.

  • Published In: Economic Inquiry, 2023, v. 61, n. 2. P. 430 1 of 3

  • Database: Academic Search Ultimate 2 of 3

  • Authored By: Burguet, Roberto; Petrikaitė, Vaiva 3 of 3

Abstract

We study targeting of advertising based on information about the consumer's likely ranking of products. Firms send ads to more promising consumers. Thus, targeting increases the expected willingness to pay for the product the consumer learns about but also reduces the expected differentiation of these products. The two effects push search, and so prices, in opposite direction. The first effect is more important for lower search costs. The second is stronger the larger the number of products. The improved selection under targeting increases firms' profitability and so advertising effort. [ABSTRACT FROM AUTHOR]

Additional Information

  • Source:Economic Inquiry. 2023/04, Vol. 61, Issue 2, p430
  • Document Type:Article
  • Subject Area:Marketing
  • Publication Date:2023
  • ISSN:0095-2583
  • DOI:10.1111/ecin.13124
  • Accession Number:162014038
  • Copyright Statement:Copyright of Economic Inquiry is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

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