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Dynamic Advertising with Spillovers: Cartel vs Competitive Fringe

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Author Info
Luca Lambertini () (University of Bologna and The Rimini Centre for Economics Analysis, Italy.)
Arsen Palestini () (University of Bologna, Italy)

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Abstract

A differential oligopoly game with advertising is investigated, where different dynamics occur between two groups of agents, the former playing a competitive Nash game and the latter cooperating as a cartel. Sufficient conditions for stability and a qualitative analysis of the profit ratio and social welfare at equilibrium are provided. A threshold value for the size of the competitive fringe is pointed out by a suitable numerical simulation.

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File URL: http://www.rcfea.org/RePEc/pdf/wp48_07.pdf
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Publisher Info
Paper provided by Rimini Centre for Economic Analysis in its series Working Paper Series with number 48-07.

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Date of creation: Jul 2007
Date of revision: Jul 2007
Handle: RePEc:rim:rimwps:48-07

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Related research
Keywords: Advertising Differential games Oligopoly Collusion

Find related papers by JEL classification:
C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
D92 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Firm Choice and Growth, Investment, or Financing
L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
M37 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Advertising

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This page was last updated on 2008-7-23.

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