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Strategic Underinvestment in Informative Advertising: The Cases of Substitutes and Complements

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Author Info
Marcel Boyer
Michel Moreaux

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Abstract

The authors analyze the strategic pricing and informative advertising decisions made by firms in duopolistic contexts. They show that, whether the products are substitutes or complements, there exist strategic settings in which firms keep potential consumers uninformed about their products even if the advertising cost is zero.

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File URL: http://economics.ca/cgi/xms?jab=v32n3/04.pdf
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Publisher Info
Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 32 (1999)
Issue (Month): 3 (May)
Pages: 654-672
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Handle: RePEc:cje:issued:v:32:y:1999:i:3:p:654-672

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Find related papers by JEL classification:
D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
M37 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Advertising

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Ulrich Doraszelski & Sarit Markovich, 2004. "Advertising Dynamics and Competitive Advantage," Computing in Economics and Finance 2004 61, Society for Computational Economics. [Downloadable!]
  2. Jeffrey Hyde & Brent Gloy, 2007. "Dynamic strategic responses among advertisers: the case of meat products," Economics Bulletin, Economics Bulletin, vol. 13(3), pages 1-14. [Downloadable!]
  3. C. Clark & Ulrich Doraszelski & Michaela Draganska, 2009. "The effect of advertising on brand awareness and perceived quality: An empirical investigation using panel data," Quantitative Marketing and Economics, Springer, vol. 7(2), pages 207-236, June. [Downloadable!] (restricted)
  4. Shi Qi, 2008. "Advertising, Entry Deterrence, and Industry Innovation," Working Papers 2008-1, University of Minnesota, Department of Economics, revised 03 2008. [Downloadable!]
  5. Shi Qi, 2008. "Advertising, Entry Deterrence, and Industry Innovation," Levine's Bibliography 122247000000002137, UCLA Department of Economics. [Downloadable!]
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This page was last updated on 2009-12-21.


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