Arbeitspapier
De-Targeting: Advertising an Assortment of Products to Loss-Averse Consumers
We consider product markets in which consumers are interested only in a specific product category and initially do not know which product category matches their tastes. Using sophisticated tracking technologies, an intermediary can make inferences about a consumer's preferred product category and offer advertising firms the possibility to target their ads to match the consumer's taste. Such targeting reduces overall advertising costs and, as a direct effect, increases industry profits. However, as we show in this paper, when consumers form reference prices and are loss averse, more precise targeting may intensify competition between firms. As a result, firms may earn higher profits from "de-targeted" advertising; i.e., when the intermediary deliberately informs about some products and their price quotes from outside a consumer's preferred product category.
- Sprache
-
Englisch
- Erschienen in
-
Series: Working Paper Series ; No. 16-03
- Klassifikation
-
Wirtschaft
Oligopoly and Other Imperfect Markets
Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
- Thema
-
Targeted advertising
Informative advertising
Consumer loss aversion
Reference prices
Contextual inference
Consumer recognition
Behavioral industrial organization
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Karle, Heiko
Peitz, Martin
- Ereignis
-
Veröffentlichung
- (wer)
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University of Mannheim, Department of Economics
- (wo)
-
Mannheim
- (wann)
-
2016
- Handle
- URN
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urn:nbn:de:bsz:180-madoc-402154
- Letzte Aktualisierung
-
10.03.2025, 11:44 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Karle, Heiko
- Peitz, Martin
- University of Mannheim, Department of Economics
Entstanden
- 2016
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