Brekke, Kurt R. (contributor); Straume, Odd Rune (contributor) - 2008
We analyse how a patent-holding pharmaceutical firm may strategically use advertising of existing drugs to affect R … industry. Within a fairly general model framework, we derive exact conditions for advertising and R&D being substitute … strategies for the incumbent firm and show that it may overinvest in advertising to reduce the incentive for an entrant to invest …