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The Impact Of Advertising In A Duopoly Game

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Author Info

  • LAMBERT SCHOONBEEK

    ()
    (Department of Economics and Econometrics, University of Groningen, P.O. Box 800, NL-9700 AV Groningen, The Netherlands)

  • PETER KOOREMAN

    ()
    (Department of Economics, Tilburg University, P.O. Box 90153, 5000 LE Tilburg, The Netherlands)

Abstract

We investigate the impact of advertising in a static differentiated duopoly. First, we consider the Nash equilibrium if firms compete with both prices and advertising. Second, we examine the Nash equilibrium if firms only compete in prices and do not advertise. We characterize the circumstances in which the profit, output, and/or price of each firm is greater (or smaller) with advertising than without advertising.

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Bibliographic Info

Article provided by World Scientific Publishing Co. Pte. Ltd. in its journal International Game Theory Review.

Volume (Year): 09 (2007)
Issue (Month): 04 ()
Pages: 565-581

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Handle: RePEc:wsi:igtrxx:v:09:y:2007:i:04:p:565-581

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Related research

Keywords: Advertising; differentiated duopoly; profits; advertising ban;

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Cited by:
  1. Annamaria Sorato & Bruno Viscolani, 2008. "Modelling smoothly the joint effect of several advertising media on sales in a homogeneous market," Working Papers 176, Department of Applied Mathematics, Università Ca' Foscari Venezia.
  2. repec:hal:wpaper:halshs-00564988 is not listed on IDEAS
  3. Viscolani, Bruno, 2012. "Pure-strategy Nash equilibria in an advertising game with interference," European Journal of Operational Research, Elsevier, vol. 216(3), pages 605-612.

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