Non-comparative versus Comparative Advertising as a Quality Signal
AbstractTwo firms produce a product with a horizontal and a vertical characteristic. We call the vertical characteristic quality. The difference in the quality levels determines how the firms share the market. Firms know the quality levels, consumers do not. Under non-comparative advertising a firm may signal its own quality. Under comparative advertising firms may signal the quality differential. In both scenarios the firms may attempt to mislead at a cost. If firms advertise, in both scenarios equilibria are revealing. Under comparative advertising the firms never advertise together which they may do under non-comparative advertising.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 7109.
Date of creation: Jan 2009
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Other versions of this item:
- Winand Emons & Claude Fluet, 2008. "Non-comparative versus Comparative Advertising as a Quality Signal," Diskussionsschriften dp0805, Universitaet Bern, Departement Volkswirtschaft.
- Emons, Winand & Fluet, Claude, 2011. "Non-comparative versus Comparative Advertising as a Quality Signal," Annual Conference 2011 (Frankfurt, Main): The Order of the World Economy - Lessons from the Crisis 48713, Verein für Socialpolitik / German Economic Association.
- Winand Emons & Claude Fluet, 2009. "Non-comparative versus Comparative Advertising as a Quality Signal," Cahiers de recherche 0902, CIRPEE.
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
- K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-02-28 (All new papers)
- NEP-COM-2009-02-28 (Industrial Competition)
- NEP-CTA-2009-02-28 (Contract Theory & Applications)
- NEP-LAW-2009-02-28 (Law & Economics)
- NEP-MIC-2009-02-28 (Microeconomics)
- NEP-MKT-2009-02-28 (Marketing)
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