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Advertising competition in a mixed oligopoly

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  • Matsumura, Toshihiro
  • Sunada, Takeaki

Abstract

We investigate a mixed oligopoly with misleading advertising competition. We find that, a welfare-maximizing public enterprise always engages in misleading advertising and that, an increase in the number of firms increases the profit and advertising level of each private firm.

Suggested Citation

  • Matsumura, Toshihiro & Sunada, Takeaki, 2013. "Advertising competition in a mixed oligopoly," Economics Letters, Elsevier, vol. 119(2), pages 183-185.
    • Handle: RePEc:eee:ecolet:v:119:y:2013:i:2:p:183-185
    DOI: 10.1016/j.econlet.2013.02.021
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    References listed on IDEAS

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    1. Matsumura, Toshihiro & Okumura, Yasunori, 2013. "Privatization neutrality theorem revisited," Economics Letters, Elsevier, vol. 118(2), pages 324-326.
    2. Keisuke Hattori & Keisaku Higashida, 2012. "Misleading advertising in duopoly," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 45(3), pages 1154-1187, August.
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    6. Toshihiro Matsumura & Daisuke Shimizu, 2010. "Privatization Waves," Manchester School, University of Manchester, vol. 78(6), pages 609-625, December.
    7. Jeffry M. Netter & William L. Megginson, 2001. "From State to Market: A Survey of Empirical Studies on Privatization," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 321-389, June.
    8. Maria José Gil-Moltó & Joanna Poyago-Theotoky & Vasileios Zikos, 2011. "R&D Subsidies, Spillovers, and Privatization in Mixed Markets," Southern Economic Journal, John Wiley & Sons, vol. 78(1), pages 233-255, July.
    9. Toshihiro Matsumura & Noriaki Matsushima, 2004. "Endogenous Cost Differentials between Public and Private Enterprises: A Mixed Duopoly Approach," Economica, London School of Economics and Political Science, vol. 71(284), pages 671-688, November.
    10. Pal, Debashis, 1998. "Endogenous timing in a mixed oligopoly," Economics Letters, Elsevier, vol. 61(2), pages 181-185, November.
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    Citations

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    Cited by:

    1. Yasui, Yuta & Haraguchi, Junichi, 2018. "Supply function equilibria and nonprofit-maximizing objectives," Economics Letters, Elsevier, vol. 166(C), pages 50-55.
    2. Bian, Junsong & Guo, Xiaolei & Li, Kevin W., 2015. "Distribution channel strategies in a mixed market," International Journal of Production Economics, Elsevier, vol. 162(C), pages 13-24.
    3. Baumann, Florian & Rasch, Alexander, 2017. "Injunctions against false advertising," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168142, Verein für Socialpolitik / German Economic Association.
    4. Hattori, Keisuke & Higashida, Keisaku, 2014. "Misleading advertising and minimum quality standards," Information Economics and Policy, Elsevier, vol. 28(C), pages 1-14.
    5. Haraguchi, Junichi & Matsumura, Toshihiro, 2017. "Firms' Costs, Profits, Entries, and Innovation under Optimal Privatization Policy," MPRA Paper 80927, University Library of Munich, Germany.
    6. Malcolm Brady, 2021. "A Game-Theoretic Model of Strategic Interaction Using Advertising: Simulating the Evolution of the Cournot Nash Equilibrium under Different Competitive Scenarios," Games, MDPI, vol. 12(4), pages 1-16, November.
    7. Longhua Liu & X. Henry Wang & Chenhang Zeng, 2020. "Endogenous Horizontal Product Differentiation in a Mixed Duopoly," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 56(3), pages 435-462, May.
    8. Junichi Haraguchi & Toshihiro Matsumura, 2021. "Profit‐enhancing entries in mixed oligopolies," Southern Economic Journal, John Wiley & Sons, vol. 88(1), pages 33-55, July.
    9. Toshihiro Matsumura & Makoto Okamura, 2015. "Competition and privatization policies revisited: the payoff interdependence approach," Journal of Economics, Springer, vol. 116(2), pages 137-150, October.
    10. Maria Jose Gil-Molto & Dimitrios Varvarigos, 2014. "Environmental Investments in Mixed vs Private Oligopoly: What are the Implications of Privatization?," Discussion Papers in Economics 14/15, Division of Economics, School of Business, University of Leicester.
    11. Toshihiro Matsumura & Akira Ogawa, 2017. "Inefficient but Robust Public Leadership," Journal of Industry, Competition and Trade, Springer, vol. 17(4), pages 387-398, December.
    12. Paul, Arindam & De, Parikshit, 2022. "Reversal of Bertrand-Cournot Ranking for Optimal Privatization Level," MPRA Paper 116272, University Library of Munich, Germany, revised 10 Feb 2023.
    13. Sharma, Ajay, 2019. "Misleading Advertising in Mixed Markets: Consumer-orientation and welfare outcomes," MPRA Paper 96189, University Library of Munich, Germany.
    14. Shaohua Han & John S. Heywood & Guangliang Ye, 2017. "Informative Advertising in a Mixed Oligopoly," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 51(1), pages 103-125, August.
    15. Kosuke Hirose & Toshihiro Matsumura, 2019. "Comparing welfare and profit in quantity and price competition within Stackelberg mixed duopolies," Journal of Economics, Springer, vol. 126(1), pages 75-93, January.
    16. Yasuhiko Nakamura, 2018. "Competition and Privatisation Policies in a Differentiated Mixed Oligopoly: The Pay†off†interdependence Approach," Australian Economic Papers, Wiley Blackwell, vol. 57(2), pages 193-216, June.
    17. Haraguchi, Junichi & Matsumura, Toshihiro, 2018. "Multiple Long-Run Equilibria in a Free-Entry Mixed Oligopoly," MPRA Paper 86704, University Library of Munich, Germany.
    18. Wang, Chia-Chi & Chiou, Jiunn-Rong, 2018. "Optimal privatization policy with Bertrand competition," International Review of Economics & Finance, Elsevier, vol. 56(C), pages 538-546.
    19. Masuda, Taku & Sato, Susumu, 2017. "Partial Privatization under Multimarket Price Competition," MPRA Paper 82269, University Library of Munich, Germany.
    20. Juan Pedro Aznar-Alarcón & Oriol Anguera-Torrell, 2023. "Fake Reviews in Online Platforms and the Effort to Fight Them," Studies in Microeconomics, , vol. 11(2), pages 235-245, August.
    21. Nakamura, Yasuhiko, 2015. "Endogenous choice of strategic incentives in a mixed duopoly with a new managerial delegation contract for the public firm," International Review of Economics & Finance, Elsevier, vol. 35(C), pages 262-277.
    22. Yongfu Liang & Leonard F. S. Wang & Yapo Yang, 2023. "What role should public firms play in the upstream market?," International Journal of Economic Theory, The International Society for Economic Theory, vol. 19(1), pages 101-117, March.
    23. Hongkun Ma & X. Henry Wang & Chenhang Zeng, 2021. "Location choice and costly product differentiation in a mixed duopoly," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 66(1), pages 137-159, February.

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    More about this item

    Keywords

    Mixed market; Misinformation; Persuasive advertising;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods

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