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Mass Retailers’ Advertising Strategies Faced with Different Competitor Store Formats: Commodity Stores or Hard Discounts

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  • Bergès, Fabian
  • Monier-Dilhan, Sylvette

Abstract

This article analyzes the effects of international trade policies on an imperfect competitive domestic market, taking into account not only consumers but also upstream and downstream firms. We first study the impact of a classic import tax decrease and we find that upstream firms are harmed and domestic fiscal revenues may decrease with such a policy. We then look at the effect of an increase in non-tariff barriers, seen as the lowest degree of substitutability between the domestic good and the imported good. The result is an improvement in each agent’s situation, since international competition becomes less fierce. Last, we show that market conditions may exist such that a coupled policy (import tax decrease and non-tariff barrier increase) makes every agent better off. This can explain why we observe a proliferation of domestic standards at national level in order to back up lower tariff negotiations by governments.

Suggested Citation

  • Bergès, Fabian & Monier-Dilhan, Sylvette, 2012. "Mass Retailers’ Advertising Strategies Faced with Different Competitor Store Formats: Commodity Stores or Hard Discounts," TSE Working Papers 12-277, Toulouse School of Economics (TSE).
    • Handle: RePEc:tse:wpaper:25525
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising

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