Industrial organization, split cable advertising experiment and ackerberg
a) The “split cable” allowed researchers to expose different consumers, who were watching the same TV show, to different amounts and types of advertising. Why might this approach be preferable to comparing consumers who saw different ads because they watched different TV shows (as in Ackerberg’s 2001 paper)?
b) Ackerberg wanted to distinguish between informative and prestige effects of advertising. Explain the intuition behind his test for which of these two effects was more important.
c) Why was it important for Ackerberg to focus his study on sales of a perishable good like yogurt? Why did he choose a brand that had recently been introducted to the market?