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With a little help from my enemy: comparative advertising as a signal of quality

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Author Info
Francesca BARIGOZZI ()
Paolo Giorgio GARELLA ()
Martin PEITZ ()

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Abstract

We extend the theory of advertising as a quality signal, using a model where an entrant can choose to advertise by comparing its product to that of an established incumbent. Comparative advertising, comparing quality of one’s own product to that of a rival’s, empowers the latter to file for court intervention if it believes the comparison to be false or misleading. We show that comparative advertising can be a signal in instances where generic advertising is not viable.

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Publisher Info
Paper provided by Department of Economics University of Milan Italy in its series Departemental Working Papers with number 2008-31.

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Date of creation: 16 Oct 2008
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Handle: RePEc:mil:wpdepa:2008-31

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Related research
Keywords: Advertising; Quality; signaling; Entry; Competition;

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Find related papers by JEL classification:
L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
M37 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Advertising
L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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This page was last updated on 2009-11-26.

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