Risk Aversion and Apparently Persuasive Advertising∗
نویسندگان
چکیده
One of the most well-established empirical facts is that exposure to advertisements increases a consumers’ tendency to buy the promoted product. The standard interpretation of this empirical regularity is that advertising intensity is an element of the utility. Here we show that if consumers are risk-averse and advertising conveys information about product attributes, the empirical regularity can be explained even without assuming that utility is directly a function of ad intensity. JEL Classification: D11, M37.
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