On the Simple Economics of Advertising, Marketing, and Product Design

David Myatt, Justin P. Johnson, Johnson Graduate School of Management and Cornell University

No 185, Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: We propose a framework for analyzing transformations of demand. Such transformations frequently stem from changes in the dispersion of consumers` valuations, which lead to rotations of the demand curve. In a wide variety of settings, profits are a U-shaped function of dispersion. A high level of dispersion is complemented by a niche posture, and low dispersion is complemented by a mass-market posture. We investigate numerous applications of our framework, including product design; advertising, marketing and sales advice; and the construction of quality-differentiated product lines. We also suggest a new taxonomy of advertising, distinguishing between hype, which shifts demand, and real information, which rotates demand.

Keywords: Monopoly; Uncertainty; Dispersion; Advertising; Marketing; Product Design; Product Lines; Price Discrimination (search for similar items in EconPapers)
JEL-codes: D21 D42 D83 L15 M31 M37 (search for similar items in EconPapers)
Date: 2004-11-01
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://ora.ox.ac.uk/objects/uuid:5d6843e5-9cdc-43ae-b772-43cffd666574 (text/html)

Related works:
Journal Article: On the Simple Economics of Advertising, Marketing, and Product Design (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oxf:wpaper:185

Access Statistics for this paper

More papers in Economics Series Working Papers from University of Oxford, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Anne Pouliquen ( this e-mail address is bad, please contact ).