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Informative advertising and competition: a non-cooperative approach

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  • GARY-BOBO, R.J.
  • MICHEL, P.

Abstract

The properties of informative advertising are studied in the context of an imperfectly competitive general equilibrium model of the Cournot-Walras type. Competitive conditions are recreated using the "replication technique." It is shown that individually optimal advertising expenditures are zero if the number of agents is large enough in the economy. In other words, even in approximately competitive economies, the informative advertising phenomenon cannot be observed. Copyright 1991 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

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Bibliographic Info

Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 1988011.

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Date of creation: 01 Jan 1988
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Handle: RePEc:cor:louvco:1988011

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Cited by:
  1. Fabio FIORILLO & Marco LILLA & Stefano STAFFOLANI, 2013. "Advertising Has Got You On The Run. Well-Being, Consumption and Leisure in a GE model," Working Papers 389, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  2. Hamilton, Stephen F., 2009. "Informative advertising in differentiated oligopoly markets," International Journal of Industrial Organization, Elsevier, vol. 27(1), pages 60-69, January.

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