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The sleeper effect of comparative advertising in oligopolistic markets

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  • Amir, Rabah
  • Machowska, Dominika
  • Nowakowski, Andrzej

Abstract

This research deals with comparative advertising strategies of firms in an oligopolistic market in the presence of the sleeper effect, through the lens of a differential game with time delay. We examine the open-loop Nash equilibrium and, for its validation, propose a new verification theorem that determines if a given strategy profile constitutes a Nash equilibrium. Our results reveal how the sleeper effect influences the equilibrium of comparative advertising strategies across two decision-making periods. Moreover, we highlight how market factors and firm attributes can significantly affect these strategies and derive conditions under which a firm will abstain from such strategies. Overall, our study provides novel insights into how market dynamics, firm attributes, and the sleeper effect interact in shaping comparative advertising strategies.

Suggested Citation

  • Amir, Rabah & Machowska, Dominika & Nowakowski, Andrzej, 2025. "The sleeper effect of comparative advertising in oligopolistic markets," Journal of Economic Dynamics and Control, Elsevier, vol. 177(C).
    • Handle: RePEc:eee:dyncon:v:177:y:2025:i:c:s0165188925000880
    DOI: 10.1016/j.jedc.2025.105122
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