Dynamic Advertising under Vertical Product Differentiation

We investigate a dynamic advertising model where product quality is endogenous. In the differential game between single-product firms, there exists a parameter range where the low-quality firm uses a more efficient advertising technology and earns higher profits than the rival. Moreover, we show that equilibrium qualities are the same under duopoly, multiproduct monopoly and social planning, the only distortion being concerned with output levels.

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Year of publication:	2002
Authors:	Colombo, Luca ; Lambertini, Luca
Publisher:	Bologna : Alma Mater Studiorum - Università di Bologna, Dipartimento di Scienze Economiche (DSE)

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Series:	Quaderni - Working Paper DSE ; 456
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	10.6092/unibo/amsacta/4839 [DOI] hdl:10419/159297 [Handle] RePEc:bol:bodewp:456 [RePEc]
Source:	EconStor

Persistent link: https://www.econbiz.de/10011651350