Yahoo! Research partnered with a nationwide retailer to study the effects of online display advertising on both online and in-store purchases. We use a randomized field experiment on 3 million Yahoo! users who are also past customers of the retailer. We find statistically significant evidence...

The mere fact that consumers are targeted by advertisements can affect their inference about the expected utility of a product. We build a micro-model where multiple firms compete through targeted advertising. Consumers make inferences from targeted advertising about their potential match values...