تبلیغات آموزنده توسط شرکت های ناهمگن

This paper introduces a model to analyze the role of the cost of information dissemination in large markets where firms have varying degrees of intrinsic efficiency reflected in their marginal costs. Firms enter a market and discover how efficient they are. Those firms with high enough efficiency stay, others exit. Remaining firms then compete to attract consumers by disseminating information about their existence and their prices using a common advertising technology. The properties of the model’s equilibrium are analyzed. The model is then used to study the effect of the cost of information dissemination on the competitiveness of the market and key industry aggregates, such as price distribution and the distribution of firm value.

This paper develops and analyzes a model of informative advertising by firms with varying degrees of efficiency which are reflected in their respective marginal costs. There are two major goals of this undertaking. The first one is to highlight the role of firm heterogeneity in markets where informative advertising is prominent. By explicitly recognizing the differences in intrinsic efficiency across firms, the paper investigates a critical aspect of the market provision of information that has not received much attention so far: the pecuniary externality imposed by more efficient firms on less efficient ones under competitive information dissemination. The nature of this “negative” externality depends on how efficiency is distributed across firms and the type of the advertising technology. The analysis emphasizes the effect of the interaction between firm heterogeneity and advertising technology on equilibrium distributions of price, firm value, and the amount of advertising. The second goal is to use the model to study the effects of an exogenous reduction in the cost of information dissemination in a market with many different types of firms. The role of consumer information has attracted renewed attention with the diffusion of e-commerce. Media revolutions over the course of history, such as newspaper, radio, television and most recently the Internet, have given way to easier and cheaper information dissemination.1 Firms now have access to more efficient technologies to reach and inform consumers. Because a firm’s success depends critically on how effectively it spreads information about itself, improvements in information technologies have had profound effects on competition among firms. Recent research on the economics of the Internet has focused mostly on the implications of reduced search costs for consumers.2 However, firms’ increasingly intense efforts to reach consumers by releasing information through online advertising have received less attention, despite the fact that Internet advertising is a major tool of competition for Internet-based firms and search engines. Major search engines, such as Yahoo! and Google, have been competing for advertising revenues by introducing new ways of making consumers click on on-line ads.3 Using the model, the effect of continuing improvements in advertising technologies on industry structure is analyzed.

This paper developed a model of informative advertising by firms that differ in their marginal costs of sale. The model was used to study the broad implications of exogenous changes in information costs. Specific consideration was given to the implications of idiosyncratic differences in efficiency across firms on the allocation of consumers across firms through advertising. The amount of advertising by firms with higher efficiency imposes a negative externality on less efficient firms. The consequences of this externality were analyzed. The nature of equilibrium pricing changes from a Bertrand outcome in the case of free advertising to monopoly pricing in the case of sufficiently high advertising costs. In between these two cases, there is a range of equilibria whose properties were analyzed in detail. In such equilibria, more efficient firms set lower prices, advertise more intensely, acquire more customers, and make higher sales. Equilibria entail continuous distributions of prices, markups, advertising levels, and firms’ market values, all of which depend on the cost of advertising and the distribution of marginal cost. When firm heterogeneity is recognized, a fall in the cost of information does not have straightforward implications on the dispersion of key variables. Under certain conditions, it is possible to make statements about the changes in equilibrium distributions of price and firms’ market values.