A note on: advertising and the price and quality of optometric services
Author: Parker, Philip M. INSEAD Area: Marketing Series: Working Paper ; 91/28/MKT Publisher: Fontainebleau : INSEAD, 1991.Language: EnglishDescription: 11 p.Type of document: INSEAD Working Paper Online Access: Click here Abstract: Theoretical research has long debated whether advertising increases market efficiencies (fostering high quality, low-priced products) or leads to perverse equilibria (fostering low-quality, higher-priced rip-offs). This note re-evaluates data collected by the US Federal Trade Commission in 1977 and reported in Kwoka (1984) who finds that marketing deregulation reduces prices of eye examinations without a decline in market quality. The re-analysis of the data reveals possible market failure in the optometric industry: an erosion of eye examination quality without a decline in prices. This conclusion is supported by recent trends within this industry and empirical findings in related professions| Item type | Current location | Collection | Call number | Status | Date due | Barcode | Item holds |
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Digital Library | Available | BC000863 |
Theoretical research has long debated whether advertising increases market efficiencies (fostering high quality, low-priced products) or leads to perverse equilibria (fostering low-quality, higher-priced rip-offs). This note re-evaluates data collected by the US Federal Trade Commission in 1977 and reported in Kwoka (1984) who finds that marketing deregulation reduces prices of eye examinations without a decline in market quality. The re-analysis of the data reveals possible market failure in the optometric industry: an erosion of eye examination quality without a decline in prices. This conclusion is supported by recent trends within this industry and empirical findings in related professions
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