Advertising and the Evolution of Market Structure in the US Car Industry

This file is part of IDEAS, which uses RePEc data

Advertising and the Evolution of Market Structure in the US Car Industry

Author Info

Geroski, Paul A
Mazzucato, Mariana

Additional information is available for the following registered author(s):

Abstract

This Paper focuses on a single simple stylized fact which stands out from the post-war history of the US Car industry, namely that industry concentration fell just at the same time as industry advertising expenditures rose sharply. Since both events were almost certainly caused by the entry and market penetration of (largely) foreign owned car producers, this stylized fact raises interesting questions about whether – and if so, how advertising affects entry. We use a model of consumer switching behaviour to help interpret the facts. The model predicts a simple linear association between market and advertising shares (which we observe fairly clearly at two different levels of aggregation in the data), and provides the basis for arguing that advertising can facilitate entry, but only for finite periods of time.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Publisher Info
Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2860.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length:
Date of creation: Jun 2001
Date of revision:
Handle: RePEc:cpr:ceprdp:2860

Contact details of provider:
Postal: Centre for Economic Policy Research, 53--56 Great Sutton Street, London EC1V 0DG
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820

Order Information:
Email:

For technical questions regarding this item, or to correct its listing, contact: ().

Find related papers by JEL classification:
L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment

References listed on IDEAS
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.:

Schmalensee, Richard, 1978. "A Model of Advertising and Product Quality," Journal of Political Economy, University of Chicago Press, vol. 86(3), pages 485-503, June. [Downloadable!] (restricted)
Schmalensee, Richard, 1976. "A Model of Promotional Competition in Oligopoly," Review of Economic Studies, Blackwell Publishing, vol. 43(3), pages 493-507, October. [Downloadable!] (restricted)
Rizzo, John A & Zeckhauser, Richard J, 1990. "Advertising and Entry: The Case of Physician Services," Journal of Political Economy, University of Chicago Press, vol. 98(3), pages 476-500, June. [Downloadable!] (restricted)
Caroline Elliott, 2001. "A Cointegration Analysis of Advertising and Sales Data," Review of Industrial Organization, Springer, vol. 18(4), pages 417-426, June. [Downloadable!] (restricted)
Cubbin, John S & Domberger, Simon, 1988. "Advertising and Post-entry Oligopoly Behaviour," Journal of Industrial Economics, Blackwell Publishing, vol. 37(2), pages 123-40, December. [Downloadable!] (restricted)
Schmalensee, Richard, 1992. "Sunk Costs and Market Structure: A Review Article," Journal of Industrial Economics, Blackwell Publishing, vol. 40(2), pages 125-34, June. [Downloadable!] (restricted)
Smiley, Robert, 1988. "Empirical evidence on strategic entry deterrence," International Journal of Industrial Organization, Elsevier, vol. 6(2), pages 167-180. [Downloadable!] (restricted)
Smallwood, Dennis E & Conlisk, John, 1979. "Product Quality in Markets Where Consumers are Imperfectly Informed," The Quarterly Journal of Economics, MIT Press, vol. 93(1), pages 1-23, February. [Downloadable!] (restricted)
Geroski, P A & Murfin, A, 1991. "Entry and Intra-industry Mobility in the UK Car Market," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 53(4), pages 341-59, November.
Nelson, Philip, 1974. "Advertising as Information," Journal of Political Economy, University of Chicago Press, vol. 82(4), pages 729-54, July/Aug.. [Downloadable!] (restricted)

Full references

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.)

Suma Athreye & Sandeep Kapur, 2006. "Industrial concentration in a liberalising economy: A study of Indian manufacturing," The Journal of Development Studies, Taylor and Francis Journals, vol. 42(6), pages 981-999, August. [Downloadable!] (restricted)
Other versions:
- Suma Athreye & Sandeep Kapur, 2004. "Industrial Concentration in a Liberalising Economy: a Study of Indian Manufacturing," Open Discussion Papers in Economics 51, The Open University, Faculty of Social Sciences, Department of Economics.

Statistics

Access and download statistics

Did you know? You too can volunteer with RePEc.

This page was last updated on 2009-11-25.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.