Eliaz, K. and Spiegler, R. (2007) Consideration sets and competitive marketing. (ELSE Working Papers 293). ESRC Centre for Economic Learning and Social Evolution: London, UK.
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Abstract
We study a market model in which competing firms use costly marketing devices to influence the set of alternatives which consumers perceive as relevant. Consumers in our model are boundedly rational in the sense that they have an imperfect perception of what is relevant to their decision problem. They apply well-defined preferences to a "consideration set", which is a function of the marketing devices employed by the firms. We examine the implications of this behavioral model in the context of a competitive market model, particularly on industry pro fits, vertical product differentiation, the use of marketing devices and consumers' conversion rates.
| Type: | Working / discussion paper |
|---|---|
| Title: | Consideration sets and competitive marketing |
| Open access status: | An open access version is available from UCL Discovery |
| Publisher version: | http://else.econ.ucl.ac.uk/newweb/papers.php#2007 |
| Language: | English |
| Keywords: | Marketing, advertising, consideration sets, bounded rationality, attention, persuasion, reason-based choice, irrelevant alternatives, internet search, search engine optimization |
| UCL classification: | UCL > School of Arts and Social Sciences > Faculty of Social and Historical Sciences > Economics |
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