This paper presents the computational model of consumer behaviour. We consider two sources of product specic consumer skill acquisition, termed here as learning how to consume: learning by consuming and consumer socialization. Consumers utilize these two sources in order to derive higher valuations for products they are consuming. In this framework we discuss the behavior of returns to product ...

We investigate the relationship between both advertising content and quantity and several stages of consumers’ decision-making, namely, unaided and aided awareness, search (consideration), and purchase. Understanding how the amount and content of advertisements affect consumers’ decision-making is crucial for companies to effectively and efficiently use their advertising budgets. Our unique ind...

An important decision for a firm is how to allocate its advertising budget among different types of advertising. Most traditional channels of advertising, such as advertising on television and in print, serve the purpose of building consumer awareness and desire about the firm’s products. With recent developments in technology, sponsored search (or paid search) advertising at search engines in ...

We develop a structural model to analyze the effects of banning advertising on demand, supply and market equilibria in junk food markets. We use transaction level data on the potato chips market and find that banning advertising does not lead to a reduction in demand because, while banning advertising reduces consumers’ taste for junk food, it also toughens price competition, leading to lower p...

This paper is a response to two recent, unrelated studies in the on-going issue of unconsciously processed advertising messages, one on similarity of hypnotic suggestion to suggestion in advertising, the other discussing more recent, similar constructs from psychology called the Duel Process Model in regard to the susceptibility of children to advertising. Implications for understanding low inv...

T paper analyzes the competitive role of retail shopping experience in markets with consumer search costs. We examine how a retailer’s advantage in providing consumer shopping experience affects its equilibrium pricing and price advertising strategies. We find that if the consumer valuation of a shopping experience is sufficiently low, its effect on retailer strategy is similar to that of quali...

In this research, we evaluate the effectiveness of the buying funnel as a model for understanding consumer interaction with keyword advertising campaigns on web search engines. We analyze data of nearly 7 million records from a 33 month, $56 million (US) search engine marketing campaign of a major US retailer. We classify key phrases used in this campaign into stages of the buying funnel (i.e.,...

An important decision for a firm is how to allocate its advertising budget among different types of advertising. Traditional advertising, such as advertising on television and in print, serves the purpose of building consumer awareness and desire about the firm’s products. With recent developments in technology, sponsored search (or paid search) advertising at search engines in response to a ke...

An important role of informative advertising is to inform consumers of the simple fact that the shop that advertises sells a particular product. This information may help consumers to save on their search activities: instead of wandering around, a consumer can simply visit the shop that has advertised, knowing that there he can find the commodity he is looking for. The implications of this simp...

This paper empirically investigates the impact of consumer characteristics on firms’advertising choice and resultant market structure by exploiting differences in investor clientele across various segments in the US mutual fund industry. I find that firms that sell directly to consumers exhibit a higher advertising elasticity of demand, higher advertising expenditures, and higher market concent...