Dynamic Informative Advertising of New Experience Goods

This paper analyzes the optimal informative advertising and price policies of a monopolist who sells a new experience good over time to a population of heterogeneous buyers. Under certain conditions, the advertising rate first increases and then decreases over the marketing cycle with a peak occurring at the end of the introductory period when prices are low. Advertising lowers introductory prices but also shortens the period during which they are offered. Advertising raises the share of consumers who know their valuation in the long-run but not necessarily in the short-run


Issue Date:
May 02 2010
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/61326
Total Pages:
39
Series Statement:
Selected Paper
11852




 Record created 2017-04-01, last modified 2017-08-25

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