Many heavily advertised consumer products are both well established and have no obvious quality variation. A signaling explanation for advertising in these product categories is therefore not compelling. In this paper we develop a model of firm advertising based on the notion that consumer...

Many advertised products are established and have little quality variation. For these products advertising signaling explanations are unconvincing. We develop a coordination model of advertising with consumers observing ads probabilistically and never observing advertising levels. Consumers who...

In this paper we model the market for a homogeneous good and examine the role of information in determining market outcomes. Unlike in Baye and Morgan (2001) where consumers can only learn about the prices charged by different firms by subscribing to an information intermediary’s service, we...

We develop a model that endogenizes both advertising format ads with or without celebrity endorsements and the endorsement fee. Marketing studies suggest that celebrities enhance brand recall and perception of product value. In our model, ads featuring celebrities occur when the product market...

We set up a rational expectations model in which investors trade a risky asset based on a private signal they receive about the quality of the asset, and a public signal that represents a noisy aggregation of the private signals of all investors. Our model allows us to examine what happens to...

We investigate the dominant role of advertising - whether it provides information or changes consumers' brand perceptions - for a wide range of product categories. For the empirical analysis, we assembled a panel data set that combines annual brand-level advertising expenditures for over three...

In this paper we discuss the potential for future electricity market restructuring in Quebec. In particular, we consider the political economy of the abolishment of the Heritage Pool requirement, which caps wholesale prices. Its elimination is challenging since it would result in higher retail...