Strategic Implications of Confirmation Bias‐Inducing Advertising

Volume: 29, Issue: 6, Pages: 1573 - 1596
Published: Apr 20, 2020
Abstract
Confirmation bias, a well-established behavioral anomaly, asserts that when product experience is ambiguous, it is assimilated consistent with expectations set up by prior advertising. In this paper, we combine a strategic model with laboratory experiments to study the effects of consumers’ confirmation bias on firms’ advertising and pricing strategies and its implications for firms’ profits. Our results suggest that confirmation bias does not...
Paper Details
Title
Strategic Implications of Confirmation Bias‐Inducing Advertising
Published Date
Apr 20, 2020
Volume
29
Issue
6
Pages
1573 - 1596
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