Learning how to consume and returns to product promotion

Arbeitspapier

This paper presents the computational model of consumer behaviour. We consider two sources of product specific 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 promotion relative to the changes in product characteristics, such as quality and user-friendliness, as well as in case of varying intensity of consumer socialization. The main finding is that in case of duopoly the dependence of returns to advertising on product quality is not monotonic as it has been claimed by earlier studies. Additional important finding indicating the importance of the models with interacting agents is that returns to advertising exhibit qualitatively different behavior in case of zero intensity of consumer socialization.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Papers on Economics and Evolution ; No. 0905

Classification and Topics

• Classification: Wirtschaft ; Consumer Economics: Theory ; Advertising ; Computational Techniques; Simulation Modeling
• Subject: Consumer skills ; learning by consuming ; consumer socialization ; product promotion ; returns to advertising

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Babutsidze, Zakaria
• Event: Veröffentlichung
• (who): Max Planck Institute of Economics
• (where): Jena
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/32640
• Last update: 10.03.2025, 11:45 AM CET