I examine the welfare implications of informative advertising in a differentiated product duopoly market. The analysis reconciles the apparently conflicting results in previous studies that find advertising to be undersupplied in homogeneous product markets and in differentiated markets with a...

A central result in the theoretical literature on strategic trade is the ërent-shifting hypothesisí, the idea that governmentís can employ trade policy as a precommitment device to transfer profit from foreign to domestic firms. To our knowledge, however, the rent-shifting hypothesis remains...