Price-increasing competition by heterogeneous marketing strategies
Lopullinen julkaistu versio - 485.18 KB
https://creativecommons.org/licenses/by/4.0/
Pysyvä osoite
Kuvaus
© 2025 The Authors. Published by Elsevier Ltd on behalf of University of Venice. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).
We study the price competition between two firms that have to advertise to reach buyers. We show that differences in advertising strategies can result in price-increasing competition. Advertising can be either informative or persuasive; the former informs buyers about the price of the standard good, and the latter increases buyers’ willingness to pay of the branded good. We show that when firms engage in different advertising methods, the pricing is in pure strategies, and if branding is effective, the firm using persuasive advertising asks a price that is higher than the monopoly price of the branded good (and, a fortiori, higher than the monopoly price of the standard good).
Emojulkaisu
ISBN
ISSN
1090-9451
1090-9443
1090-9443
Aihealue
Kausijulkaisu
Research in economics|79
OKM-julkaisutyyppi
A1 Alkuperäisartikkeli tieteellisessä aikakauslehdessä (vertaisarvioitu)