Seminar on "Targeted Advertising with Asymmetric Consumer Loyalty"

Abstract: This paper explores the strategic tradeoff between advertising and pricing when firms have asymmetric loyal market segments and also can compete for shoppers who purchase at the lowest advertised price. Two advertising structures consistent with real world settings are considered. In the first setting firms are limited to advertising campaigns that reach a chosen proportion of the entire market and present all consumers with a uniform price. The analysis is then extended to allow firms to target ads to specific market segments, both with and without the ability to price discriminate. Our model nests other well-known models as special cases and provides novel results. We find that targeted advertising may or may not increase social welfare, while it increases consumer surplus only if the cost of advertising is sufficiently high. In addition, it is possible the firm with the larger loyal segment earns lower profits under targeted rather than uniform advertising. Notwithstanding this, in an extension we show firms have incentive to invest ex-ante in targeting technology, even when they lack the ability to price discriminate.

個人簡介: 北京师范大学（珠海）人文和社会科学高等研究院副教授, 商业经济学博士。南开大学经济学学士，浙江大学，香港科技大学经济学硕士。2010年获得美国印第安纳大学凯利商学院商业经济学博士学位。曾任教于西南财经大学经济与管理研究院。研究领域包括产业经济学、实验经济学和应用经济学。论文发表在《Games and Economic Behavior》、《International Journal of Game Theory》、《Journal of Law, Economics & Organization》、《Journal of Industrial Organization》、《Journal of Economic Behavior and Organization》、《经济学（季刊）》等杂志上。