Project description
Understanding the economics of information flow to customers
The information available to consumers on new products is a vital component in marketing and ultimately in revenues for companies. With the additional concerns over consumer privacy and the need for targeted advertising, companies are pressed to come up with policies that keep a difficult balance. INSTRUCT project addresses this issue by studying the effect of the cycle of information on consumers and producers, for the former in terms of what information influences a purchase, and for the latter in terms of what kind of information translates into a purchase and revenues. INSTRUCT will develop modelling that sheds light on how awareness of consumer preferences by both sides drives markets and shapes pricing for products.
Objective
Information flows are fundamental to how well markets work for consumers and firms. Consumers get different deals depending on (a) how much they know about the offerings of different firms and, conversely, (b) how much firms know about consumer preferences. The internet is transforming both (a) and (b), allowing consuInformation flows are fundamental to how well markets work for consumers and firms. Consumers get different deals depending on (a) how much they know about the offerings of different firms and, conversely, (b) how much firms know about consumer preferences. The internet is transforming both (a) and (b), allowing consumers to discover and evaluate products with greater ease and enabling firms to personalise prices and target their advertising. Economic understanding currently lags behind what is needed for robust policy formulation in the areas of consumer privacy, price discrimination, and the costs of search and advertising. This project aims to fill that gap.
How does the structure of information in consumer markets affect market performance, and which kinds of information should be stimulated or controlled? I propose four lines of enquiry to address this over-arching theme: (1) to develop innovative modeling techniques to understand how the structure of information about consumer preferences (possessed by firms and by consumers themselves) affects overall surplus and how that surplus is divided between firms and consumers; (2) to develop methods to study how the structure of consideration sets (i.e. the set of firms a consumer is able or willing to consider for her purchase) affects market outcomes; (3) to analyse how the information channels of advertising by firms and search by consumers interact and which is more important for the efficient functioning of markets, and (4) to investigate which aspects of their preferences consumers are willing to share with firms and thereby understand better how to solve difficult but important pricing problems.
Fields of science (EuroSciVoc)
CORDIS classifies projects with EuroSciVoc, a multilingual taxonomy of fields of science, through a semi-automatic process based on NLP techniques. See: The European Science Vocabulary.
CORDIS classifies projects with EuroSciVoc, a multilingual taxonomy of fields of science, through a semi-automatic process based on NLP techniques. See: The European Science Vocabulary.
- natural sciences computer and information sciences internet
- social sciences sociology social issues social inequalities
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Programme(s)
Multi-annual funding programmes that define the EU’s priorities for research and innovation.
Multi-annual funding programmes that define the EU’s priorities for research and innovation.
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H2020-EU.1.1. - EXCELLENT SCIENCE - European Research Council (ERC)
MAIN PROGRAMME
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Topic(s)
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Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.
Funding Scheme
Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.
Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.
ERC-ADG - Advanced Grant
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Call for proposal
Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.
Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.
(opens in new window) ERC-2018-ADG
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Net EU financial contribution. The sum of money that the participant receives, deducted by the EU contribution to its linked third party. It considers the distribution of the EU financial contribution between direct beneficiaries of the project and other types of participants, like third-party participants.
WC1E 6BT LONDON
United Kingdom
The total costs incurred by this organisation to participate in the project, including direct and indirect costs. This amount is a subset of the overall project budget.