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A Game Theory Model of Celebrity Endorsements

By Hertzendorf, Mark N.

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Book Id: WPLBN0000156295
Format Type: PDF eBook
File Size: 3.6 MB
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Title: A Game Theory Model of Celebrity Endorsements  
Author: Hertzendorf, Mark N.
Language: English
Subject: Trade, Import and export controls, Federal Trade Commission (U.S.)
Collection: Economics Publications Collection
Subcollection: Federal Trade Commission
Publication Date:
Publisher: Government Printing Office

Government Reference Publication

Abstract: Since Milgrom and Roberts (1986) game theorists studying advertising have generally assumed that aggregate advertising expenditures are perfectly observed by consumers. In the real world, however, consumers see only a small fraction of the commercials aired by a given firm and typically do not view the firm's total advertising expenditure. This gives the firm an incentive to make sure that each commercial has as much impact as possible. The impact of a commercial may be enhanced through extravagant production costs, or by purchasing a celebrity endorsement.


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