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Dynamic Informative Advertising of New Experience Goods

Alexander Saak (alexanderesaak@gmail.com)

No 103536, 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania from Agricultural and Applied Economics Association

Abstract: This paper analyzes the optimal advertising and price policies of a monopolist who sells a new experience good over time to a population of heterogeneous forward-looking buyers. We consider informative advertising that can complement or substitute for learning-by-purchasing, and show that the advertising intensity always peaks during the early stages when the price extracts surplus from the buyers who are yet to learn their valuation for the good. We also show that even though informative advertising may temporarily raise prices and slow down the learning process, an advertising ban can reduce welfare.

Keywords: Agribusiness; Agricultural and Food Policy; Demand and Price Analysis; Industrial Organization; Marketing (search for similar items in EconPapers)
Pages: 2
Date: 2011
New Economics Papers: this item is included in nep-com and nep-cta
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https://ageconsearch.umn.edu/record/103536/files/ASaak_AAEA%20poster%202011.pdf (application/pdf)

Related works:
Journal Article: Dynamic Informative Advertising of New Experience Goods (2012) Downloads
Working Paper: Dynamic informative advertising of new experience goods (2011) Downloads
Working Paper: Dynamic Informative Advertising of New Experience Goods (2010) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea11:103536

DOI: 10.22004/ag.econ.103536

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