In some markets consumers seek exclusive consumption experiences, yet in these markets businesses sometimes market their goods widely and at low prices during an introduction period. We use a two-period game-theoretic model to provide a signaling explanation for this phenomenon. In our model,...

This research analyzes a firm's investment in advertising that signals quality when consumers learn about quality not only from such advertising but also from interactions with other consumers in the form of observational learning or word of mouth. Further, word of mouth interactions may involve...

Firms invest significantly in advertising with the intent of influencing consumers favorably towards their goods. Along with advertising, word of mouth also plays an important role in shaping consumer opinion about a firm's goods. In many contexts, word of mouth is affected by behaviors such as...