conformity. In equilibrium, both quality and cost leaders choose higher advertising intensities and charge higher prices than …This paper analyzes persuasive advertising and pricing in oligopoly if firms sell differentiated products and consumers … that the demand-enhancing effect of persuasive advertising varies across consumers and increases in the average degree of …

Economists have emphasized the role of dissipative advertising and price as signals of quality. Most works, however …), advertising appears to be necessary together with price to signal quality. Equilibrium profits depend on cost but not on quality …, limit the number of types to two options: high and low quality. Yet, production costs and quality both result from R …

In a standard adverse selection world, asymmetric information about product quality leads to quality deterioration in … the market. Suppose that a higher investment level makes the realization of high quality more likely. Then, if consumers … observe the investment (but not the realization of product quality) before purchase, they can infer the probability …