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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/26026
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| Title: | Information Gathering and Marketing |
| Authors: | Bar-Isaac, Heski
Caruana, Guillermo
Cunat, Vicente |
| Keywords: | information gathering
monopoly
marketing
pricing
investment |
| Issue Date: | Apr-2008 |
| Series/Report no.: | EC-08-17 |
| Abstract: | Consumers have only partial knowledge before making a purchase decision,
but can choose to acquire more detailed information. A Örm can make
it easier or harder for these consumers to obtain such information. We
explore consumersíinformation gathering and the Örmís
integrated strategy for marketing, pricing, and investment in quality.
In particular, we highlight that when consumers are ex-ante
heterogeneous, the Örm might choose an intermediate marketing
strategy for two quite di§erent reasons. First, it serves as a
non-price means of discriminationó it can make information only
partially available, in a way that induces some, but not all, consumers
to acquire the information. Second, when the Örm cannot commit to a
given investment in quality, it can still convince all consumers of its
provision by designing a pricing and marketing policy that induces some
consumers to actively gather further information. This mass of
consumers, in exchange, is su¢ ciently large to discipline the
monopolist to invest in the quality of the product. |
| URI: | http://hdl.handle.net/2451/26026 |
| Appears in Collections: | Economics Working Papers
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