Dynamics of retail advertising: evidence from a field experiment.: An article from: Economic Inquiry

This digital document is an article from Economic Inquiry, published by Western Economic Association International on July 1, 2009. The length of the article is 12223 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available immediately after purchase. You can view it with any web browser.

From the author: We use a controlled field experiment to investigate the dynamic effects of retail advertising. The experimental design overcomes limitations hindering previous investigations of this issue. Our study uncovers dynamic advertising effects that have not been considered in previous literature. We find that current advertising does affect future sales, but surprisingly, the effect is not always positive; for the firm's best customers, the long-run outcome may be negative. This finding reflects two competing effects: brand switching and intertemporal substitution. We also find evidence of cross-channel substitution, with the firm's best customers switching demand to the ordering channel that corresponds to the advertising. (JEL L2, L81, M3)

Citation Details
Title: Dynamics of retail advertising: evidence from a field experiment.
Author: Duncan Simester
Publication:Economic Inquiry (Magazine/Journal)
Date: July 1, 2009
Publisher: Western Economic Association International
Volume: 47 Issue: 3 Page: 482(18)

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