Persuading Consumers With Social Attitudes
Journal
Journal of Economic Behavior and Organization
ISSN
0167-2681
ISSN-Digital
1879-1751
Type
journal article
Date Issued
2012-09
Author(s)
Abstract
This paper provides a formal analysis of persuasive advertising when firms compete for consumers with heterogenous social attitudes towards the consumption by others. Deriving product demand from primitives, we show that the demand-enhancing effect of persuasive advertising varies across consumers and increases in the average degree of conformity. In equilibrium, both quality and cost leaders choose higher advertising intensities and charge higher prices than their competitors. In addition, we show that an increase in the average degree of conformity among consumers reinforces asymmetries between firms.
Language
English
Keywords
Advertising
Social attitude
Consumption externality
Quality
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
Elsevier
Publisher place
Amsterdam
Volume
84
Number
1
Start page
439
End page
450
Pages
12
Subject(s)
Eprints ID
141633
File(s)![Thumbnail Image]()
Name
EWP-1117.pdf
Size
251.11 KB
Format
Adobe PDF
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