"We sold a million copies" The Role of Advertising Past Sales
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"We sold a million copies" The Role of Advertising Past Sales. / Monteiro, Paolo Klinger; Moraga Gonzalez, Jose Luis.
Cph. : Department of Economics, University of Copenhagen, 1999.Research output: Working paper › Research
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TY - UNPB
T1 - "We sold a million copies"
T2 - The Role of Advertising Past Sales
AU - Monteiro, Paolo Klinger
AU - Moraga Gonzalez, Jose Luis
N1 - JEL Classification: D82, L15, M37
PY - 1999
Y1 - 1999
N2 - We model a two period monopoly market with two-sided quality uncertainty. In first period, seller gathers information about consumers´ tastes upon observing its sales. In second period, seller may or may not deliver the information. If monopolist must commit either to reveal or conceal past-sales before observing them, committing to reveal is the dominant strategy whenever advertising cost is low, buyers are many and their private information is accurate. When seller can postpone advertising decision and gains experience, past-sales revelation occurs partially. In equilibrium, delivery of sales-data occurs to induce some buyers´ herding behaviour. We carry out the analysis for two different informational scenarios.
AB - We model a two period monopoly market with two-sided quality uncertainty. In first period, seller gathers information about consumers´ tastes upon observing its sales. In second period, seller may or may not deliver the information. If monopolist must commit either to reveal or conceal past-sales before observing them, committing to reveal is the dominant strategy whenever advertising cost is low, buyers are many and their private information is accurate. When seller can postpone advertising decision and gains experience, past-sales revelation occurs partially. In equilibrium, delivery of sales-data occurs to induce some buyers´ herding behaviour. We carry out the analysis for two different informational scenarios.
KW - Faculty of Social Sciences
KW - two-sided quality uncertainty, past-sales advertis
M3 - Working paper
BT - "We sold a million copies"
PB - Department of Economics, University of Copenhagen
CY - Cph.
ER -
ID: 161080