1
$\begingroup$

In this research paper titled: Advertising Spillovers: Field-Experiment Evidence and Implications for Returns from Advertising, I come across the following assumption:

Utility of a product at time t($u_t$) = Awareness about the product($alpha_t$) + Advertising intensity of the product at time t$f(A_it)$

Claim in the paper: (If utility is high, there is more likelihood that the user would buy the product.)

Advertising intensity means the number of times the user has seen the ad of the product in a single session on the website.

And the function $f(.)$ is non-decreasing.

So, my question is: How does the advertising intensity increase the utility of a product?

(Is it due to the $+ve$ information about the product given to the user through advertising, or did I go wrong in understanding the concept of utility somewhere?)

$\endgroup$

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Browse other questions tagged or ask your own question.