Advertising and attachment: exploiting loss aversion through prepurchase information

• 成果类型: Article
• 署名作者: Karle, Heiko; Schumacher, Heiner
• 署名单位: Frankfurt School Finance & Management; KU Leuven
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12208
• 发表日期: 2017
• 页码: 927-948
• 关键词: reference-dependent preferences; reference points; product quality; expectations; COMPETITION; metaanalysis; consumers; signal

摘要

We analyze a monopolist's optimal advertising strategy when consumers are expectation-based loss-averse and uncertain about their individual match value with the product. Advertising provides verifiable match value information. It modifies the consumers' reference point and hence their willingness to pay for the product. We show that the optimal advertising strategy pools different consumer types so that some consumers engage in ex ante unfavorable trade. Incomplete informative advertising thus has a persuasive effect. This provides a rationale for policies that force the monopolist to disclose important product characteristics, not only at the point of sale, but also in all promotional materials.