10.4 Advertising Effects

The following section and reading are based on professor Kenneth C. Wilbur’s Seminar on Advertising

A. Mitra and Lynch, Jr. (1995)

  • Advertising affect price elasticity via:

    • the size of consideration set

    • the relative strength of preference


Anand and Shachar (2011)

  • Horizontal differentiation: “advertisement (informational role) decreases the consumer’s probability of not choosing her best alternative by approximately 10%.”


Stephens-Davidowitz, Varian, and Smith (2017)


Lewis and Reiley (2014)


Draganska, Hartmann, and Stanglein (2013)


Hoban and Bucklin (2015)


Hartmann and Klapper (2018)


N. Sahni, Zou, and Chintagunta (2014)


References

Anand, Bharat N., and Ron Shachar. 2011. “Advertising, the Matchmaker.” The RAND Journal of Economics 42 (2): 205–45. https://doi.org/10.1111/j.1756-2171.2011.00131.x.
Draganska, Michaela, Wesley R. Hartmann, and Gena Stanglein. 2013. “Internet Versus Television Advertising: A Brand-Building Comparison.” Journal of Marketing Research 51 (5): 578–90. https://doi.org/10.1509/jmr.13.0124.
Hartmann, Wesley R., and Daniel Klapper. 2018. “Super Bowl Ads.” Marketing Science 37 (1): 78–96. https://doi.org/10.1287/mksc.2017.1055.
Hoban, Paul R., and Randolph E. Bucklin. 2015. “Effects of Internet Display Advertising in the Purchase Funnel: Model-Based Insights from a Randomized Field Experiment.” Journal of Marketing Research 52 (3): 375–93. https://doi.org/10.1509/jmr.13.0277.
Lewis, Randall A., and David H. Reiley. 2014. “Online Ads and Offline Sales: Measuring the Effect of Retail Advertising via a Controlled Experiment on Yahoo!” Quantitative Marketing and Economics 12 (3): 235–66. https://doi.org/10.1007/s11129-014-9146-6.
Mitra, Anusree, and John G. Lynch, Jr. 1995. “Toward a Reconciliation of Market Power and Information Theories of Advertising Effects on Price Elasticity.” Journal of Consumer Research 21 (4): 644. https://doi.org/10.1086/209425.
Sahni, Navdeep, Dan Zou, and Pradeep K. Chintagunta. 2014. “Effects of Targeted Promotions: Evidence from Field Experiments.” SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2530290.
Stephens-Davidowitz, Seth, Hal Varian, and Michael D. Smith. 2017. “Super Returns to Super Bowl Ads?” Quantitative Marketing and Economics 15 (1): 1–28. https://doi.org/10.1007/s11129-016-9179-0.