This paper reports a laboratory experiment to study pricing and advertising behavior in a market with costly buyer … increases in either search or advertising costs are reflected in higher equilibrium prices. To test the predictions regarding … the level and dispersion of prices and advertising intensity, we vary the costs of search and advertising as well as the …

Can advertising lead to a sustainable competitive advantage? To answer this question, we propose a dynamic model of … advertising competition where firms repeatedly advertise, compete in the product market, and make entry as well as exit decisions …. Within this dynamic framework, we study two different models of advertising: In the first model, advertising influences the …