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OPTIMAL MEDIA ALLOCATION DECISIONS FOR GENERIC ADVERTISERS
Author(s) -
Kinnucan Henry W.,
Thomas Maria
Publication year - 1997
Publication title -
journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.157
H-Index - 61
eISSN - 1477-9552
pISSN - 0021-857X
DOI - 10.1111/j.1477-9552.1997.tb01163.x
Subject(s) - incentive , microeconomics , advertising , markup language , competition (biology) , variety (cybernetics) , economics , imperfect , investment (military) , set (abstract data type) , business , computer science , ecology , linguistics , philosophy , artificial intelligence , politics , political science , xml , law , biology , operating system , programming language
Media allocation rules are derived for generic advertisers under a variety of market structures, marketing technologies and policy settings. The rules indicate that once the budget is set, allocation decisions can proceed strictly on the basis of media‐specific advertising elasticities. The investment decision, however, is more complex. In addition to the media‐specific advertising elasticities, generic advertisers need to take into account the price sensitivity of consumers, supply response, markup behaviour, advertising ‘tax’ incidence, policy setting, and competitive conditions. A general finding is that protection blunts the incentive to advertise collectively, while imperfect competition enhances the incentive.