I consider a cheap-talk model in which a firm has a chance to communicate its product quality to consumers. The model describes how advertising can be both informative to consumers and profitable for the firm through its content in a vertically differentiated market. I find that advertising content may be effective in inducing search even if incentives for misrepresentation exist. In particular, a firm with an undesirable (low-quality) product is able to attract consumers who would have not incurred a search cost had they known its true quality. In this case, a semiseparating equilibrium occurs where the lowest firm types pool upward in order to increase the expected product quality while simultaneously signaling that the product is affordable. Although consumers always benefit from truth in advertising, total welfare may decrease if an undesirable firm is required to reveal its type. Finally, I show that the extent to which misrepresentation can take place increases with the cost of advertising coverage.

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This article investigates the in-flight marketplace, using detailed data of in-flight purchases to understand social effects in purchase behavior and determine their potential for designing marketing promotions. On average, a passenger is approximately 30% more likely to buy an item after being exposed to a lateral purchase. Analyses on the underlying mechanisms reveal that the classical social influence theories do not suffice to explain all the patterns in the data. The author proposes omission neglect, product contagion, and goal balancing as complementary theories. Finally, consumers' willingness to buy is shown to be positively correlated with responsiveness to social influence. This finding indicates that homophily and social feedback effects-classically viewed in the literature as nuisances-can provide targeting value for the firm. By taking these factors into account during behavior-based targeting, firms can double the social spillovers of marketing actions.

Big data and technological change have enabled loyalty programs to become more prevalent and complex. How these developments influence society has been overlooked, both in academic research and in practice. We argue why this issue is important and propose a framework to refocus loyalty programs in the era of big data through a societal lens. We focus on three aspects of the societal lens-inequality, privacy, and sustainability. We discuss how loyalty programs in the big data era impact each of these societal factors, and then illustrate how, by adopting this societal lens paradigm, researchers and practitioners can generate insights and ideas that address the challenges and opportunities that arise from the interaction between loyalty programs and society. Our goal is to broaden the perspectives of researchers and managers so they can enhance loyalty programs to address evolving societal needs.