IDEAS home Printed from https://ideas.repec.org/a/bpj/revmkt/v14y2016i1p69-87n2.html
   My bibliography  Save this article

Spillovers in Attribute Advertising

Author

Listed:
  • Schmeiser Steven

    (Department of Economics, Mount Holyoke College, 50 College Street, South Hadley, MA 01075, United States of America)

Abstract

When firms advertise a vertically differentiated product attribute, they increase the weight consumers put on that attribute. This creates a spillover effect as one firm’s advertising can increase demand for other firms that also have the attribute. I develop a market share attraction model and find that as spillover increases, firms advertise less. Profit can be increasing or decreasing in spillover depending on the particular industry environment. Spillover lends a “public good” quality to advertising and firms free-ride in equilibrium. An advertising ban has an ambiguous effect on the profits of firms with the attribute, but always increases profits of firms without the attribute.

Suggested Citation

  • Schmeiser Steven, 2016. "Spillovers in Attribute Advertising," Review of Marketing Science, De Gruyter, vol. 14(1), pages 69-87, June.
    • Handle: RePEc:bpj:revmkt:v:14:y:2016:i:1:p:69-87:n:2
    DOI: 10.1515/roms-2014-0020
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/roms-2014-0020
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/roms-2014-0020?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Bloch, Francis & Manceau, Delphine, 1999. "Persuasive advertising in Hotelling's model of product differentiation," International Journal of Industrial Organization, Elsevier, vol. 17(4), pages 557-574, May.
    2. Victor Tremblay & Stephen Polasky, 2002. "Advertising with Subjective Horizontal and Vertical Product Differentiation," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 20(3), pages 253-265, May.
    3. Milgrom, Paul & Roberts, John, 1986. "Price and Advertising Signals of Product Quality," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 796-821, August.
    4. Frank M. Bass & Anand Krishnamoorthy & Ashutosh Prasad & Suresh P. Sethi, 2005. "Generic and Brand Advertising Strategies in a Dynamic Duopoly," Marketing Science, INFORMS, vol. 24(4), pages 556-568, February.
    5. Claudio A. Piga, 1998. "A Dynamic Model of Advertising and Product Differentiation," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 13(5), pages 509-522, October.
    6. Caputo, Michael R., 1996. "The Envelope Theorem and Comparative Statics of Nash Equilibria," Games and Economic Behavior, Elsevier, vol. 13(2), pages 201-224, April.
    7. Bagwell, Kyle, 2007. "The Economic Analysis of Advertising," Handbook of Industrial Organization, in: Mark Armstrong & Robert Porter (ed.), Handbook of Industrial Organization, edition 1, volume 3, chapter 28, pages 1701-1844, Elsevier.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhu, Chen & Lopez, Rigoberto A. & Liu, Xiaoou, 2019. "Consumer responses to front-of-package labeling in the presence of information spillovers," Food Policy, Elsevier, vol. 86(C), pages 1-1.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Allard Made & Lambert Schoonbeek, 2009. "Entry Facilitation by Environmental Groups," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 43(4), pages 457-472, August.
    2. Chioveanu, Ioana, 2008. "Advertising, brand loyalty and pricing," Games and Economic Behavior, Elsevier, vol. 64(1), pages 68-80, September.
    3. Alderighi, Marco & Bianchi, Carluccio & Lorenzini, Eleonora, 2016. "The impact of local food specialities on the decision to (re)visit a tourist destination: Market-expanding or business-stealing?," Tourism Management, Elsevier, vol. 57(C), pages 323-333.
    4. Belleflamme,Paul & Peitz,Martin, 2015. "Industrial Organization," Cambridge Books, Cambridge University Press, number 9781107687899.
    5. Stivers, Andrew & Tremblay, Victor J., 2005. "Advertising, search costs, and social welfare," Information Economics and Policy, Elsevier, vol. 17(3), pages 317-333, July.
    6. Régis Chenavaz & Sajjad M. Jasimuddin, 2017. "An analytical model of the relationship between product quality and advertising," Post-Print hal-01685892, HAL.
    7. Thomas de Haan & Theo Offerman & Randolph Sloof, 2015. "Money Talks? An Experimental Investigation Of Cheap Talk And Burned Money," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 56(4), pages 1385-1426, November.
    8. Hattori, Keisuke & Higashida, Keisaku, 2014. "Misleading advertising and minimum quality standards," Information Economics and Policy, Elsevier, vol. 28(C), pages 1-14.
    9. Blasco, Andrea & Sobbrio, Francesco, 2012. "Competition and commercial media bias," Telecommunications Policy, Elsevier, vol. 36(5), pages 434-447.
    10. Reo Song & Sungha Jang & Gangshu (George) Cai, 2016. "Does advertising indicate product quality? Evidence from prelaunch and postlaunch advertising in the movie industry," Marketing Letters, Springer, vol. 27(4), pages 791-804, December.
    11. Leonardo Bursztyn & Davide Cantoni, 2016. "Tear in the Iron Curtain: The Impact of Western Television on Consumption Behavior," The Review of Economics and Statistics, MIT Press, vol. 98(1), pages 25-41, March.
    12. Simon P. Anderson & Régis Renault, 2013. "The Advertising Mix for a Search Good," Management Science, INFORMS, vol. 59(1), pages 69-83, April.
    13. Laurent Cavenaile & Pau Roldan-Blanco, 2021. "Advertising, Innovation, and Economic Growth," American Economic Journal: Macroeconomics, American Economic Association, vol. 13(3), pages 251-303, July.
    14. Jie Bai, 2016. "Melons as Lemons: Asymmetric Information, Consumer Learning and Seller Reputation," Natural Field Experiments 00540, The Field Experiments Website.
    15. Schumacher, Heiner, 2014. "Incentives through consumer learning about tastes," International Journal of Industrial Organization, Elsevier, vol. 37(C), pages 170-177.
    16. Lola Esteban & José M. Hernández & José Luis Moraga‐González, 2006. "Customer Directed Advertising and Product Quality," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 15(4), pages 943-968, December.
    17. Halbheer, Daniel & Stahl, Florian & Koenigsberg, Oded & Lehmann, Donald R., 2014. "Choosing a digital content strategy: How much should be free?," International Journal of Research in Marketing, Elsevier, vol. 31(2), pages 192-206.
    18. Keisuke Hattori & Keisaku Higashida, 2023. "Who should be regulated: Genuine producers or third parties?," Journal of Economics, Springer, vol. 138(3), pages 249-286, April.
    19. Salvatore Piccolo & Piero Tedeschi & Giovanni Ursino, 2018. "Deceptive Advertising with Rational Buyers," Management Science, INFORMS, vol. 64(3), pages 1291-1310, March.
    20. Mostafa Monzur Hasan & Grantley Taylor & Grant Richardson, 2022. "Brand Capital and Stock Price Crash Risk," Management Science, INFORMS, vol. 68(10), pages 7221-7247, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:revmkt:v:14:y:2016:i:1:p:69-87:n:2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.