Price and Advertising Signals of Product Quality
نویسندگان
چکیده
منابع مشابه
A Dynamic Model of Brand Choice When Price and Advertising Signal Product Quality
In this paper, we develop a structural model of household behavior in an environment where there is uncertainty about brand attributes, and both prices and advertising signal brand quality. Four quality signaling mechanisms are at work in the model: 1) price signals quality, 2) advertising frequency signals quality, 3) advertising content provides direct (but noisy) information about quality, a...
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We consider a market where a single seller must employ informative advertising to launch a new product of observable quality. The monopolist may use mass, targeted or customer directed advertising. We show that the choice of advertising strategy depends on the economic properties of the advertising technology. If this exhibits strong economies of targeting, customer directed advertising arises ...
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Many advertisements inform the consumer about product characteristics, while others give price information with very little product information, and some provide both types of information. We propose a framework to analyze the incentives for firms to provide various types of information. We consider the case of a single seller. There is no incentive to provide information on product characteris...
متن کاملAssessing Price and Non-Price Signals of Drug Quality
Pharmaceutical products can be of poor quality either because they contain zero correct active ingredient (referred to as “counterfeit”) or because they contain a non-zero but incorrect amount of the right active ingredient (referred to as “substandard”).While both types of poorquality drugs can be dangerous, they differ in health consequence, price, and potential policy remedies. Assessing bas...
متن کاملPrice and Shortage as Signals of Quality∗
This paper analyzes the role of seller-induced shortage as a signal of quality for a monopoly firm. Unlike dissipative advertising, the cost of inducing shortage is different for different quality types. It is shown that under certain conditions, a high-quality monopoly firm (of a new indivisible product) that signals quality by properly setting price and inducing shortage makes more profit tha...
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ژورنال
عنوان ژورنال: Journal of Political Economy
سال: 1986
ISSN: 0022-3808,1537-534X
DOI: 10.1086/261408