Customer Directed Advertising and Product Quality

  title={Customer Directed Advertising and Product Quality},
  author={J. M. Hernandez and Jos{\'e} Luis},
This paper considers a market where a single seller must employ informative advertising to launch a new product of observable quality. We formulate a fairly general advertising technology that allows us to study three promotional strategies —mass, targeted and customer directed advertising. We show that when the advertising technology exhibits strong economies of targeting, property that we find empirically plausible, both the private and social incentives to use distinct advertising strategies… CONTINUE READING