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 characteristics 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 CIRPEE in its series Cahiers de recherche with number 0902.
Date of creation: 2009
Date of revision:
Advertising; costly state falsification; signalling;
Other versions of this item:
- Emons, Winand & Fluet, Claude, 2009. "Non-comparative versus Comparative Advertising as a Quality Signal," CEPR Discussion Papers 7109, C.E.P.R. Discussion Papers.
- 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, 2008. "Non-comparative versus Comparative Advertising as a Quality Signal," Diskussionsschriften dp0805, Universitaet Bern, Departement Volkswirtschaft.
- 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-2009-02-14 (All new papers)
- NEP-COM-2009-02-14 (Industrial Competition)
- NEP-CTA-2009-02-14 (Contract Theory & Applications)
- NEP-LAW-2009-02-14 (Law & Economics)
- NEP-MIC-2009-02-14 (Microeconomics)
- NEP-MKT-2009-02-14 (Marketing)
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