JOB MARKET PAPER
Persuasive Advertising in Conformist and Snobbish Markets
Paper [60 minute presentation]
I model persuasive advertising for conspicuous goods that can either be made more attractive by greater popularity ("conformist markets'') or by greater exclusivity ("snobbish markets''). Consumers are endowed with a latent attribute measuring some aspect of their identity, and a social status implied by this attribute. Consumers wish to signal a high social status, and the function of advertising is to render brands a signaling device by linking products with social groups. In a conformist market, I find that advertising increases demand elasticity, inducing firms to converge on low prices, and can be used by a first mover to deter entry and gain monopoly rents. In this setting, advertising creates a cutthroat environment in which only one product can survive. In a snobbish market, advertising reduces demand elasticity, dampens price competition and promotes firm entry. In this setting, advertising can act as a public good to firms, increasing all firms' prices and profits. Additionally, it can lead to asymmetric equilibria where a firm appealing to high status consumers advertises more heavily, capturing a greater market share and charging a higher price. Furthermore, I bring micro-foundation to persuasive advertising, allowing analysis of the channels through which it impacts welfare. Finally, I show that the model can help explain well-documented empirical puzzles in the marketing and empirical industrial organization literatures.
Presented: 14th Bass FORMS Conference (2020), Georgetown (2019), Economic Graduate Student Conference at Washington University in St. Louis (2019), Villanova Meeting on Behavioral and Experimental Economics (2019)
WORKING PAPERS
Your Success is My Motivation with Emel Filiz-Ozbay
Paper (R&R at Journal of Economic Behavior and Organization)
Presented: Economic Science Association North America Meetings (2019, coauthor presented)
Funded (in part): UMD Dean's Research Initiative
Presented: Economic Science Association World Meetings (2019), Economic Science Association North America Meetings (2019), Stanford GSB Political Economy Seminar (2019, coauthor presented), Barcelona GSE Summer Forum (2019, coauthor presented), CREST Malinvaud-Adres Seminar (2018, coauthor presented), Fourth Taxation Theory Conference at Washington University in St. Louis (2018, coauthor presented)
Funding: NSF Social and Economic Sciences Grant 1534132
Strategic Delegation and Fairness in Bargaining
Paper (R&R at Journal of Mechanism and Institution Design)