Homogeneity and heterogeneity in stochastic models of brand choice behavior

Givon, Moshe; Horsky, Dan

doi:10.1016/0167-8116(85)90038-2

Cited by 7 publications

(1 citation statement)

References 53 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Peltzman postulates that false advertisements should affect first-time buyers rather than loyal buyers. However, data limitations at the time forced Peltzman to rely on an aggregated yearly autoregressive market-share model that imposes strong assumptions on individual behavior, as pointed out in Givon and Horsky (1985). On the other hand, our study exploits within-household variation to identify heterogeneity in consumer responses.…”

Section: Contributionmentioning

confidence: 99%

Demand for “Healthy” Products: False Claims and FTC Regulation

Rao

Wang

2017

Journal of Marketing Research

View full text Add to dashboard Cite

Firms sometimes make selective or deceptive claims, which can have negative consequences for consumers, especially if consumers are not fully informed and the claims are hard to verify. This study aims to measure the decline in demand that a firm making such claims faces when caught. In addition, it seeks to understand which type of consumer these claims primarily affect. Using a panel data set of consumer purchases and firm advertising, the authors measure this impact by exploiting the fact that four popular products settled charges raised by the Federal Trade Commission. They further control for and document firm responses in terms of price and advertisement changes around the date of the settlement. Findings indicate a significant decline in demand following the termination of the claims, resulting in a 12%–67% monthly loss in revenue across the four products, which amounts to a $.40 million–$3.82 million loss in monthly revenue. They also find that these claims primarily affect consumers who are newcomers.

show abstract

Section: Contributionmentioning

confidence: 99%