1.25.11 Class Reading Summary

1.25.11 Class Reading Summary - sensitivity, lower prices,...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
1.25.11 Overall Theme Advertising = Market Power model, advertising is thought to influence consumer tastes, establish brand loyalty, and ultimately raise profits and consumer prices by decreasing price sensitivity and competition. In the Advertising = Information model, advertising is seen as providing information to consumers, resulting in increased price
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: sensitivity, lower prices, and reduced monopoly power Complications to the two models: 1. Several contradictory ways of understanding the causal relationship between advertising and price 2. Difficulty in estimating the relationship between advertising and price premium 3. Brand loyalty has uncertain/unclear implications 4. Impact of the Internet...
View Full Document

This note was uploaded on 02/14/2011 for the course ADPR 5140 taught by Professor Krugman during the Spring '11 term at University of Georgia Athens.

Ask a homework question - tutors are online