This paper develops a model of informative advertising in which a firm builds a database using its historical sales records in order to directly target ads on those consumers who have a high probability of purchasing its products. We show that the firm can use this type of direct advertising as...

This paper presents an incomplete information game of pricing and targeted advertising with vertically differentiated product. Firms have incomplete information about production costs and can inform consumers about price and product characteristics by either using the mass media, which reaches...