Social and Behavioral Sciences Commons^™

Exploring And Explaining Consumer Competition: A Mixed-Methods Approach To Understanding The Phenomenon, Bridget M Satinover Nichols

Doctoral Dissertations

The purpose of this dissertation is to examine the phenomenon of “consumer competition.” The overarching objective is to help researchers and marketing practitioners understand how the phenomenon is created, how consumers experience competition, and to begin to inspect its effects. Consumer competition is defined as the active processes of striving against others for the acquisition of a consumption object. To date, this phenomenon has been under-researched, despite its prevalence in many marketing and consumer-related domains.

An extensive literature synthesis provides the foundation for understanding competition and competitiveness in general from a multi-disciplinary perspective. Based on the synthesis of literature and …

Advertising Collusion In Retail Markets, Kyle Bagwell, Gea M. Lee

Research Collection School Of Economics

We analyze non-price advertising by retail firms, when the firms are privately informed about their respective costs of production. In a static advertising game, an advertising equilibrium exists in which lower-cost firms select higher advertising levels. In this equilibrium, informed consumers rationally employ an advertising search rule in which they buy from the highest-advertising firm since lower-cost firms also select lower prices. In a repeated advertising game, colluding firms face a trade-off: the use of advertising can promote productive efficiency, but only if sufficient current or future advertising expenses are incurred. At one extreme, if firms pool at zero advertising, …

Advertising Competition In Retail Markets, Kyle Bagwell, Gea Myoung Lee

Research Collection School Of Economics

We consider non-price advertising by retail firms that are privately informed as to their respective production costs. We construct an advertising equilibrium, in which informed consumers use an advertising search rule whereby they buy from the highest-advertising firm. Consumers are rational in using the advertising search rule, since the lowest-cost firm advertises the most and also selects the lowest price. Even though the advertising equilibrium facilitates productive efficiency, we establish conditions under which firms enjoy higher expected profit when advertising is banned. Consumer welfare falls in this case, however. Under free entry, social surplus is higher when advertising is allowed. …

Advertising Competition In Retail Markets, Kyle Bagwell, Gea M. Lee

Research Collection School Of Economics

We consider non-price advertising by retail firms that are privately informed as to their respective production costs. We construct an advertising equilibrium, in which informed consumers use an advertising search rule whereby they buy from the highest-advertising firm. Consumers are rational in using the advertising search rule, since the lowest-cost firm advertises the most and also selects the lowest price. Even though the advertising equilibrium facilitates productive effi ciency, we establish conditions under which firms enjoy higher expected profit when advertising is banned. Consumer welfare falls in this case, however. Under free entry, social surplus is higher when advertising is …