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Endogenous timing and manufacturer advertising: A note

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  • Qing Hu
  • Tomomichi Mizuno

Abstract

We consider a vertical market comprising of a manufacturer engaging in advertising and two retailers offering differentiated products. We analyze the endogenous order of moves for the retailers and demonstrate that they may choose a more competitive environment: simultaneous pricing under Bertrand competition or sequential producing under Cournot competition. This result is robust even if we extended our model to third‐degree wholesale price discrimination and persuasive advertising.

Suggested Citation

  • Qing Hu & Tomomichi Mizuno, 2021. "Endogenous timing and manufacturer advertising: A note," Metroeconomica, Wiley Blackwell, vol. 72(2), pages 309-320, May.
    • Handle: RePEc:bla:metroe:v:72:y:2021:i:2:p:309-320
    DOI: 10.1111/meca.12321
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    References listed on IDEAS

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    Cited by:

    1. Qing Hu & Dan Li & Tomomichi Mizuno, 2024. "Endogenous choice of price or quantity contract with upstream advertising," Metroeconomica, Wiley Blackwell, vol. 75(1), pages 34-51, February.

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