Sparking curiosity or tipping the scales? Targeted advertising with consumer learning
Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt
Standard
Sparking curiosity or tipping the scales? Targeted advertising with consumer learning. / Matveenko, Andrei; Starkov, Egor.
I: Journal of Economic Behavior & Organization, Bind 213, 102885, 09.2023, s. 172-192.Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt
Harvard
APA
Vancouver
Author
Bibtex
}
RIS
TY - JOUR
T1 - Sparking curiosity or tipping the scales? Targeted advertising with consumer learning
AU - Matveenko, Andrei
AU - Starkov, Egor
PY - 2023/9
Y1 - 2023/9
N2 - This paper argues, in the context of targeted advertising, that receivers’ ability to independently acquire information has a non-trivial impact on the sender’s optimal disclosure strategy. In our model, a monopolist has an opportunity to launch an advertising campaign and chooses a targeting strategy – which consumers to send its advertisement to. The consumers are uncertain about and heterogeneous in their valuations of the product, and can engage in costly learning about their true valuations. We discover that the firm generally prefers to target consumers who are either indifferent between ignoring and investigating the product, or between investigating and buying it unconditionally. If the firm is uncertain about the consumer appeal of its product, it targets these two distinct groups of consumers simultaneously but may ignore all consumers in between.
AB - This paper argues, in the context of targeted advertising, that receivers’ ability to independently acquire information has a non-trivial impact on the sender’s optimal disclosure strategy. In our model, a monopolist has an opportunity to launch an advertising campaign and chooses a targeting strategy – which consumers to send its advertisement to. The consumers are uncertain about and heterogeneous in their valuations of the product, and can engage in costly learning about their true valuations. We discover that the firm generally prefers to target consumers who are either indifferent between ignoring and investigating the product, or between investigating and buying it unconditionally. If the firm is uncertain about the consumer appeal of its product, it targets these two distinct groups of consumers simultaneously but may ignore all consumers in between.
U2 - 10.1016/j.jebo.2023.07.008
DO - 10.1016/j.jebo.2023.07.008
M3 - Journal article
VL - 213
SP - 172
EP - 192
JO - Journal of Economic Behavior & Organization
JF - Journal of Economic Behavior & Organization
SN - 0167-2681
M1 - 102885
ER -
ID: 362340662