Strategic Advertising for Entry Deterrence Purposes
AbstractThis paper evaluates the possible effects of advertising on conditions of entry in a market with one incumbent and one potential entrant. Through a game-theoretic framework, it is shown that the use of pre-entry advertising expenditures (which are supposed to exhibit diminishing returns) may discourage entry even when firms behave rationally and face the same conditions of cost and demand.
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Bibliographic InfoPaper provided by CELPE (Centre of Labour Economics and Economic Policy), University of Salerno, Italy in its series CELPE Discussion Papers with number 61.
Date of creation: Mar 2001
Date of revision:
market structure; advertising;
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- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
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