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Advertising and Market Structure

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New Developments in the Analysis of Market Structure

Part of the book series: International Economic Association Series ((volume 77))

Abstract

Manufacturers take many actions designed to enhance the demand for their products. They generally deal with product design and packaging, price structures at wholesale and retail levels, training and deployment of sales personnel, and the economic and contractual dimensions of the distribution channels they employ. They may also engage in media advertising. Retailers generally engage in most of these same activities. Consumer purchase decisions are affected by many external stimuli. Consumers may take into account their own experience, the experiences of friends and relatives, conversations with sales people and other experts, data on relevant prices, and information about product attributes, obtained from a variety of public sources. Purchase decisions may also be affected by media advertising.2

I am indebted to the National Science Foundation for Research support, to Severin Borenstein for excellent research assistance, and to Alexis Jacquemin, Steven Salop, Jesus Seade and Joseph Stiglitz for helpful comments on an earlier version.

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Author information

Authors and Affiliations

  1. Massachusetts Institute Of Technology, USA

    Richard Schmalensee

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  1. Richard Schmalensee
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Editor information

Joseph E. Stiglitz G. Frank Mathewson

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© 1986 International Economic Association

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Schmalensee, R. (1986). Advertising and Market Structure. In: Stiglitz, J.E., Mathewson, G.F. (eds) New Developments in the Analysis of Market Structure. International Economic Association Series, vol 77. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-18058-5_13

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