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14.4. ADVERTISING AND BRAND SWITCHING. Empirical evidence suggests that the proba- bility of a household switching to a different brand of breakfast cereal is increasing in the advertising intensity of that brand. However, the effect of advertising is significantly lower for households who have previously tried that brand.21 What does this suggest about the nature of advertising expenditures (persuasion vs. information)?

14.4. ADVERTISING AND BRAND SWITCHING. Empirical evidence suggests that the proba- bility of a household switching to a different brand of breakfast cereal is increasing in the advertising intensity of that brand. However, the effect of advertising is significantly lower for households who have previously tried that brand.21 What does this suggest about the nature of advertising expenditures (persuasion vs. information)?

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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14.4. ADVERTISING AND BRAND SWITCHING. Empirical evidence suggests that the proba- bility of a household switching to a different brand of breakfast cereal is increasing in the advertising intensity of that brand. However, the effect of advertising is significantly lower for households who have previously tried that brand.21 What does this suggest about the nature of advertising expenditures (persuasion vs. information)?
Transcribed Image Text:14.4. ADVERTISING AND BRAND SWITCHING. Empirical evidence suggests that the proba- bility of a household switching to a different brand of breakfast cereal is increasing in the advertising intensity of that brand. However, the effect of advertising is significantly lower for households who have previously tried that brand.21 What does this suggest about the nature of advertising expenditures (persuasion vs. information)?
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