Advertising, learning, and consumer choice in experience good markets: an empirical examination*

2003/07/10 by Daniel A. Ackerberg · 2 citations
Business, Management and Accounting · Economics, Econometrics and Finance · #Consumer Market Behavior and Pricing #Economics of Agriculture and Food Markets #Merger and Competition Analysis

paper · pdf · doi:10.1111/1468-2354.t01-2-00098

Abstract

This article empirically analyzes different effects of advertising in a nondurable, experience good market. A dynamic learning model of consumer behavior is presented in which I allow both “informative” effects of advertising and “prestige” or “image” effects of advertising. This learning model is estimated using consumer level panel data tracking grocery purchases and advertising exposures over time. Empirical results suggest that in this market, advertising's primary effect was that of informing consumers. The estimates are used to quantify the value of this information to consumers and evaluate the welfare implications of an alternative advertising regulatory regime.

Cited by

• Do Past Experience and Group Heterogeneity Matter to Consumer Preferences? Evidence From a Choice Experiment in Urban China. [europepmc]
• Uptake of and willingness to pay for health insurance in rural Senegal: a reinforcement effect. [europepmc]

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