Using Bait And Switch Advertising

1305 WordsNov 14, 20166 Pages
Edward Lazear, an economist who graduated from Stanford, defines bait and switch advertising as when a “low priced good is advertised but replaced by a different good at the showroom.” (813) In other words, what is advertised is not the final product. Rather, the advertisement is used to draw in customers who then must settle for the next best thing – according to the company, of course. Additionally, he gives a second definition of bait and switch. This definition is the conditional opposite, though it has the same central meaning: “a seller advertises he has the high-quality good at a low price but replaces it with the identical good, renamed and carrying a higher price.” (Lazear 828) Lazear also claims that bait and switch is a “profitable strategy resulting in a fully rational equilibrium with false advertising.” (813) The profitable nature of using bait and switch advertising is a direct result of consumer susceptibility. When using bait and switch tactics, enough customers “may be induced into the showroom by advertising to make up for those lost from failing to advertise truthfully” (Lazear 818). However, that profit turns on its head when the company is caught participating in such a practice. One example of bait and switch tactics working against a company is in the case of Laptop & Desktop Repair, LLC. The owner, Vadim Kruchinin, reportedly misled customers with “high-dollar offers to buy back their electronics, only to give consumers far less after they sent
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