Targeted Advertising and Advertising Avoidance
32 Pages Posted: 11 Mar 2012
Date Written: December 21, 2011
I examine how the increasing ability of firms to target their advertisements to particular individuals influences market outcomes when consumers have access to advertising avoidance tools. While firms generally benefit from increased targeting, consumers need not. I also show that there may be too little blocking of advertisements in equilibrium, and consider the role of targeted advertising when niche firms compete for ad inventory against mass-market firms.
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