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On advertising durability and product durability

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  • Rajeev Goel

Abstract

This paper uses a simple two-period model to examine the behaviour of a monopolist who produces a durable good and engages in advertising that is also somewhat durable. It is found that changes in product durability and advertising durability have opposite effects on profit-maximizing output and advertising. Policy implications for antitrust and health regulation are discussed.

Suggested Citation

  • Rajeev Goel, 2007. "On advertising durability and product durability," Applied Economics Letters, Taylor & Francis Journals, vol. 14(1), pages 21-25.
  • Handle: RePEc:taf:apeclt:v:14:y:2007:i:1:p:21-25
    DOI: 10.1080/13504850500425550
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    1. David Levine, 1985. "A Simple Durable Goods Model," The Quarterly Journal of Economics, Oxford University Press, vol. 100(3), pages 775-788.
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