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We consider a duopoly in a homogenous goods market where part of the consumers are ex ante uninformed about prices …. Information can come through two different channels: advertising and sequential consumer search. We arrive at the following … results. First, there is no monotone relationship between prices and the degree of advertising. Second, advertising and search …
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We analyze a market where firms compete in a conventional and an electronicretail channel. Consumers easily compare prices online, but some incur purchaseuncertainties on the online channel. We investigate the market shares of the two retailchannels and the prices that are charged. We find that...
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the basic fact that they sell the product. In this way, advertising lowers the expected search cost. We show that this … role of advertising can lead to a situation where advertised prices are higher than non-advertised prices in equilibrium. …
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Consider a Bertrand model in which each firm may be inactive with aknown probability, so the number of active firms is uncertain. Thissimple model has a mixed-strategy equilibrium in which industryprofits are positive and decline with the number of firms, the samefeatures which make the Cournot...
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