Gomes, Renato D.B.; Mello, João Manoel Pinho de - Departamento de Economia, Pontifícia Universidade … - 2006
By engendering horizontal differentiation, non-price advertising increases the incentives to accommodate on the price dimension. However, advertising also increases the size of the market and, consequently, the payoffs to price undercutting, which induces more aggressive price competition. We...