Working Paper: CEPR ID: DP5064
Authors: Simon P. Anderson; Régis Renault
Abstract: Empirical evidence suggests that most advertisements contain little direct information. Many do not mention prices. We analyse a monopoly firm?s choice of advertising content and the information disclosed to consumers. The firm advertises only product information, price information, or both; and prefers to convey only limited product information if possible. It is socially harmful to force it to provide full information if it has sufficient ability to parse the information imparted, but nor does it help to restrict the information voluntarily provided.
Keywords: content analysis; information disclosure; informative advertising; search
JEL Codes: D42; L15; M37
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| firm's choice of advertising content (M37) | consumer behavior (D19) |
| firm's choice of advertising content (M37) | market performance (G14) |
| search costs (D23) | market performance (G14) |
| advertising content (M37) | consumer decisions (D12) |
| match advertising (C78) | consumer willingness to pay (D11) |
| forcing firms to disclose information (G38) | socially harmful outcomes (I12) |
| restricting informational content of advertisements (M38) | lower prices (P22) |
| restricting informational content of advertisements (M38) | unfruitful visits (Y50) |