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The Effects of Advertising on the Price of Eye Glasses
Abstract
Focuses on the effect of advertising on the price of eyeglasses in the United States. Restrictions of advertising in the market for eyeglasses; Price differentials associated with advertising restrictions; Influence of advertising on consumer's knowledge. (Из Ebsco)
... Визначаючи кут нахилу кривої залишкового попиту на товар відповідної фірми, марки, моделі тощо -фактично еластичність попиту в зоні ринкової влади, коефіцієнт еластичності здавна слугував індикатором ефективності експлуатації ринкової влади. Ще А. Пігу побудував свою теорію сегментної цінової дискримінації на ключовій ролі еластичності попиту в процесі ціноутворення [229, c. [342][343][344][345][346][347][348][349][350][351][352][353][354][355][356][357][358][359][360][361]. Значення еластичності попиту за власною ціною блага застосовує у своїй моделі ціноутворення на засадах мінімізації чистих суспільних втрат на регульованих ринках Ф. Рамсей [484, c. 47-61]. ...
У монографії досліджено сутність та роль ринкової влади в економічних системах минулого і сучасності; виявлено її основні джерела та проаналізовано вплив кожного з них на формування, посилення і експлуатацію ринкової влади суб’єктами господарювання. З урахуванням широкого спектра соціально-економічних наслідків реалізації ринкової влади методологічно обґрунтовано необхідність її кількісного оцінювання на основі показника втрат суспільного добробуту. Розроблено авторську методику відповідного оцінювання та визначено на цій основі суспільну ціну ринкової влади у межах вітчизняних галузевих ринків та для економіки України в цілому, а також пропозиції щодо удосконалення чинної конкурентної політики в Україні з метою мінімізації негативного впливу ринкової влади на суспільний добробут та економічне зростання. Розраховано на науковців, викладачів, фахівців Антимонопольного комітету України та інших органів державної влади, залучених до реалізації конкурентної політики в Україні і за кордоном.
In the Milgrom‐Roberts's advertising model, introducing the possibility to die before customers' repurchase alters the firm's advertising incentive to signal hidden product quality. Two opposing forces result, one mechanical and the other strategic. Depending on their relative strengths, the equilibrium advertising can either rise or fall. To the extent that competition threatens firms' survival, our result explains the mixed findings on the causal effects of competition on advertising. Introducing firm deaths in their model offers a new test of whether advertising signals quality, still an unsettled empirical question since Nelson first articulates advertising as a signal in 1974.
The value that consumers derive from behavioral advertising has been more often posited than empirically demonstrated. The majority of empirical work on behavioral advertising has focused on estimating the effectiveness of behaviorally targeted ads, measured in terms of click or conversion rates. We present the results of two online within-subject experiments (Study 1 and Study 2) that, instead, employ a counterfactual approach, designed to assess comparatively some of the consumer welfare implications of behaviorally targeted advertising. Participants are presented with alternative product offers: products advertised in ads displayed to them on websites that commonly show behaviorally targeted ads (ad condition); competing products from the organic results of online searches (search condition); and random products (random condition). The alternatives are compared along a variety of metrics, including objective measures (such as product price and vendor quality) and participants’ self-reports (such as purchase intention and perceived product relevance). In Study 1 (n = 489) we find, first, that both ads and organic search results within our sample of participants are dominated by a minority of vendors; however, ads are more likely to present participants with less popular (and therefore lesser known) vendors. Second, we find that purchase intentions are higher in the ad and the search conditions than in the random condition; the effect is driven by higher product relevance in the ad and search conditions; however, in absolute terms, product relevance is low, even in the ad condition. Third, we find that ads are more likely to be associated with lower quality vendors, and higher prices (for identical products), compared to competing alternatives found in search results. Study 2 (n = 493) replicates Study 1 results. In addition, Study 2 finds that higher purchase intentions and higher relevance in the ad condition are driven by participants having previously searched for the advertised product. Furthermore, we use a latent utility model to estimate differences in consumer surplus (a commonly used measure of consumer welfare) across conditions. In our sample of participants, the random condition is associated with the lowest surplus. After accounting for differences in vendor quality, the search condition is associated with slightly higher surplus relative to the ad condition.
The following is an overview of advertising and its impact on markets and society. In general, advertising is one-way communication that is designed and transmitted by a sender to a receiver. The objective of the sender is to affect a decision that the receiver will make and this decision relates to issues which have direct impact on the sender. Advertising is observed to have two important roles. The first is creating awareness of the sender in terms of both recall and recognition. The second is to provide the receiver with detailed information that enhances her understanding of the situation. In markets, advertising can make prices go up or go down and for this reason there is significant controversy regarding the manner in which advertising works and its overall impact on society. There are models that reconcile these seemingly contradictory views of advertising. Nevertheless, the one-sided nature of advertising messages and advertising clutter limit advertising’s effectiveness. A trend of reduced impact is likely to increase over time.
Having argued in Part One against extensive judicial or regulatory interference with private personnel credentialing in the health care field, this Article now shifts its focus to emphasize the anticompetitive hazards inherent in credentialing as practiced by professional interests. Competitor-sponsored credentialing is shown to be a vital part of a larger cartel strategy to curb competition by standardizing personnel and services and controlling the flow of information to health care consumers. Instead of altering the conclusions reached in Part One, however, Part Two sets forth a new and hitherto unexplored agenda for antitrust enforcement, one that the authors believe will increase the quantity and quality of information available to consumers and offer a fairer competitive environment to individuals and groups disadvantaged by the denial of desirable credentials. The specific targets singled out for antitrust scrutiny are (1) the practice of "grandfathering," by which new candidates for credentials are required to meet tougher requirements than were met by existing credential holders; (2) agreements to standardize educational programs if they go beyond setting and applying accrediting standards and impair the freedom of institutions to decide independently whether to offer unaccredited training; (3) agreements by which independent certifying or accrediting bodies limit the nature or scope of competition among themselves; and (4) mergers and joint ventures in credentialing and accrediting. The legal theory supporting antitrust attacks in the latter two categories is strengthened by the apparently original insight that commercial information and opinion are themselves articles of commerce such that agreements and combinations restricting their nature and output can be characterized as restraints of trade. Among the many self-regulatory institutions in the health care field whose operation or sponsorship is called into question by the analysis herein are the leading medical specialty boards, the Liaison Committee on Medical Education, various accrediting and certifying bodies in the allied health occupations, and the Joint Commission on Accreditation of Hospitals.
Public choice scholars have attended only modestly to issues in public health. We expect that to change rapidly given the Covid-19 pandemic. The time therefore is ripe for taking stock of public-choice relevant scholarship that addresses issues in public health. That is what we do. Our stock-taking highlights three themes: (1) Public health regulations often are driven by private interests, not public ones. (2) The allocation of public health resources often reflects private interests, not public ones. (3) Public health policies may have perverse effects, undermining instead of promoting health-consumer welfare.
The identification of sellers and the discovery of their prices is given as an example of the role of the search for information in economic life.