{"id":{"repo_id":"uiuc","oai_identifier":"oai:www.ideals.illinois.edu:2142/70738"},"canonical_url":"https://search.dev.ndltd.org/etd/uiuc/oai:www.ideals.illinois.edu:2142/70738","repository":{"repo_id":"uiuc","name":"University of Illinois - Urbana-Champaign","base_url":"https://www.ideals.illinois.edu/oai-pmh"},"display":{"title":"Consumer Learning and Brand Loyalty When Product Quality Is Unknown","abstract":"Some recent research has focused on the behavior of agents under incomplete information, one aspect of which is the effect of learning on optimal decision making. This thesis explores the effects of consumer learning about product quality on a firm's optimal pricing strategies under different market structures.","abstract_html":"Some recent research has focused on the behavior of agents under incomplete information, one aspect of which is the effect of learning on optimal decision making. This thesis explores the effects of consumer learning about product quality on a firm's optimal pricing strategies under different market structures.","abstract_has_math":false,"creators":["Goering, Patricia Ann"],"institution":"University of Illinois at Urbana-Champaign","degree_name":"Ph.D.","degree_level":"Dissertation","degree_discipline":"Economics","degree_department":null,"school":null,"contributors":[],"advisors":[],"committee_chairs":[],"committee_members":[],"year":1983,"date_issued":"1983","date_published":"1983","updated_at":"2026-07-22T22:26:03Z","subjects":["Economics, Theory"],"languages":[],"rights":[],"rights_urls":[],"identifier_entries":[{"key":"dc:identifier","label":"Identifier","values":["(UMI)AAI8324560"],"render_values":[{"text":"(UMI)AAI8324560","href":null,"code":true}]}]},"links":{"outbound_url":"http://hdl.handle.net/2142/70738","outbound_label":"Handle","outbound_source":"dc:identifier"},"metadata_groups":[{"id":"people","label":"People","entries":[{"key":"dc:creator","label":"Author","values":["Goering, Patricia Ann"]}]},{"id":"academic_context","label":"Academic Context","entries":[{"key":"dc:date","label":"Dc Date","values":["1983","2014-12-16T04:04:51Z","10000-01-01"]},{"key":"dc:type","label":"Dc Type","values":["text"]},{"key":"thesis:degree_discipline","label":"Discipline","values":["Economics"]},{"key":"thesis:degree_level","label":"Degree Level","values":["Dissertation"]},{"key":"thesis:degree_name","label":"Degree Name","values":["Ph.D."]},{"key":"thesis:institution_name","label":"Thesis Institution Name","values":["University of Illinois at Urbana-Champaign"]}]},{"id":"subjects_keywords","label":"Subjects and Keywords","entries":[{"key":"dc:subject","label":"Dc Subject","values":["Economics, Theory"]}]},{"id":"identifiers","label":"Identifiers","entries":[{"key":"dc:identifier","label":"Identifier","values":["http://hdl.handle.net/2142/70738","(UMI)AAI8324560"]}]},{"id":"additional","label":"Additional Metadata","entries":[{"key":"dc:description","label":"Description","values":["Some recent research has focused on the behavior of agents under incomplete information, one aspect of which is the effect of learning on optimal decision making. This thesis explores the effects of consumer learning about product quality on a firm's optimal pricing strategies under different market structures.","A two period model is presented in which the average quality of the product is exogenously determined and is unknown to consumers. Consumers' purchasing decisions are based on their expectations about average quality. Consumers use information about average quality acquired by observing a sample to revise their expectations. Because consumers receive different samples, their expectations vary. As learning occurs, the demand curve shifts. Current prices which determine the number of purchasers affect future demand. The "manipulating" firm increases profits by taking this effect into account when setting current prices.","The main results of the model under different market situations are, first, when no entry occurs or when several competitive firms enter, a sufficient condition is specified under which there exists a unique level of average quality such that if the product's average quality is high, the manipulating firm's optimal first period price is lower than the "non-manipulating" firm who chooses current prices to maximize current profits. A low initial price increases the number of consumers who, on average, raise their expectations and are willing to make future purchases at higher prices. If the product's average quality is low, however, the optimal "manipulating" first period price is higher than the non-manipulating price, decreasing the rate of consumer learning.","Second, when a single firm enters, a Stackelberg equilibrium is established. The incumbent must then consider not only the direct effect of its first period price on its future demand, but also the indirect effect on the entrant's demand and price which, in turn, affects the incumbent's demand. It is shown that these two forces may pull in different directions, limiting the incumbent's ability to manipulate future demand.","Made available in DSpace on 2014-12-16T04:04:51Z (GMT). No. of bitstreams: 1 8324560.pdf: 6287300 bytes, checksum: 2cc1b06030692353752827f2c58cb72d (MD5) Previous issue date: 1983","Embargo set by: Seth Robbins for item 70904 Lift date: Forever Reason: Restricted to the U of I community idenfinitely during batch ingest of legacy ETDs","Restricted to the U of I community idenfinitely during batch ingest of legacy ETDs","U of I Only","219 p.","Thesis (Ph.D.)--University of Illinois at Urbana-Champaign, 1983."]},{"key":"dc:title","label":"Title","values":["Consumer Learning and Brand Loyalty When Product Quality Is Unknown"]}]}],"canonical_facts":{"dc:creator":["Goering, Patricia Ann"],"dc:date":["1983","2014-12-16T04:04:51Z","10000-01-01"],"dc:description":["Some recent research has focused on the behavior of agents under incomplete information, one aspect of which is the effect of learning on optimal decision making. This thesis explores the effects of consumer learning about product quality on a firm's optimal pricing strategies under different market structures.","A two period model is presented in which the average quality of the product is exogenously determined and is unknown to consumers. Consumers' purchasing decisions are based on their expectations about average quality. Consumers use information about average quality acquired by observing a sample to revise their expectations. Because consumers receive different samples, their expectations vary. As learning occurs, the demand curve shifts. Current prices which determine the number of purchasers affect future demand. The "manipulating" firm increases profits by taking this effect into account when setting current prices.","The main results of the model under different market situations are, first, when no entry occurs or when several competitive firms enter, a sufficient condition is specified under which there exists a unique level of average quality such that if the product's average quality is high, the manipulating firm's optimal first period price is lower than the "non-manipulating" firm who chooses current prices to maximize current profits. A low initial price increases the number of consumers who, on average, raise their expectations and are willing to make future purchases at higher prices. If the product's average quality is low, however, the optimal "manipulating" first period price is higher than the non-manipulating price, decreasing the rate of consumer learning.","Second, when a single firm enters, a Stackelberg equilibrium is established. The incumbent must then consider not only the direct effect of its first period price on its future demand, but also the indirect effect on the entrant's demand and price which, in turn, affects the incumbent's demand. It is shown that these two forces may pull in different directions, limiting the incumbent's ability to manipulate future demand.","Made available in DSpace on 2014-12-16T04:04:51Z (GMT). No. of bitstreams: 1 8324560.pdf: 6287300 bytes, checksum: 2cc1b06030692353752827f2c58cb72d (MD5) Previous issue date: 1983","Embargo set by: Seth Robbins for item 70904 Lift date: Forever Reason: Restricted to the U of I community idenfinitely during batch ingest of legacy ETDs","Restricted to the U of I community idenfinitely during batch ingest of legacy ETDs","U of I Only","219 p.","Thesis (Ph.D.)--University of Illinois at Urbana-Champaign, 1983."],"dc:identifier":["http://hdl.handle.net/2142/70738","(UMI)AAI8324560"],"dc:subject":["Economics, Theory"],"dc:title":["Consumer Learning and Brand Loyalty When Product Quality Is Unknown"],"dc:type":["text"],"thesis:degree_discipline":["Economics"],"thesis:degree_level":["Dissertation"],"thesis:degree_name":["Ph.D."],"thesis:institution_name":["University of Illinois at Urbana-Champaign"]},"updated_at":"2026-07-22T22:26:03Z"}