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Informative advertising and competition: a non-cooperative approach


  • MICHEL, P.


The properties of informative advertising are studied in the context of an imperfectly competitive general equilibrium model of the Cournot-Walras type. Competitive conditions are recreated using the "replication technique." It is shown that individually optimal advertising expenditures are zero if the number of agents is large enough in the economy. In other words, even in approximately competitive economies, the informative advertising phenomenon cannot be observed. Copyright 1991 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Gary-Bobo, R.J. & Michel, P., 1988. "Informative advertising and competition: a non-cooperative approach," CORE Discussion Papers 1988011, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:1988011

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    References listed on IDEAS

    1. Moulin, Herve, 1979. "Dominance Solvable Voting Schemes," Econometrica, Econometric Society, vol. 47(6), pages 1137-1151, November.
    2. Kennan, John & Wilson, Robert, 1990. "Can Strategic Bargaining Models Explain Collective Bargaining Data?," American Economic Review, American Economic Association, vol. 80(2), pages 405-409, May.
    3. David Card, 1990. "Strikes and Wages: A Test of an Asymmetric Information Model," The Quarterly Journal of Economics, Oxford University Press, vol. 105(3), pages 625-659.
    4. Gretlein, Rodney & Hamilton, Jonathan & Slutsky, Steven, 1996. "To fight or not to fight? That is the question," Mathematical Social Sciences, Elsevier, vol. 31(2), pages 85-114, April.
    5. Kennan, John & Wilson, Robert, 1989. "Strategic Bargaining Models and Interpretation of Strike Data," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 4(S), pages 87-130, Supplemen.
    6. Martin J. Osborne & Ariel Rubinstein, 2005. "Bargaining and Markets," Levine's Bibliography 666156000000000515, UCLA Department of Economics.
    7. Hayes, Beth, 1984. "Unions and Strikes with Asymmetric Information," Journal of Labor Economics, University of Chicago Press, vol. 2(1), pages 57-83, January.
    8. Milgrom, Paul & Roberts, John, 1982. "Predation, reputation, and entry deterrence," Journal of Economic Theory, Elsevier, vol. 27(2), pages 280-312, August.
    9. Oliver Hart, 1989. "Bargaining and Strikes," The Quarterly Journal of Economics, Oxford University Press, vol. 104(1), pages 25-43.
    10. repec:cup:apsrev:v:79:y:1985:i:04:p:943-957_23 is not listed on IDEAS
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    Cited by:

    1. Hamilton, Stephen F., 2009. "Informative advertising in differentiated oligopoly markets," International Journal of Industrial Organization, Elsevier, vol. 27(1), pages 60-69, January.
    2. Fabio FIORILLO & Marco LILLA & Stefano STAFFOLANI, 2013. "Advertising Has Got You On The Run. Well-Being, Consumption and Leisure in a GE model," Working Papers 389, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    3. Nelson Sá, 2015. "Market concentration and persuasive advertising: a theoretical approach," Journal of Economics, Springer, vol. 114(2), pages 127-151, March.
    4. Hamilton, Stephen F., 2004. "Informative Advertising in Concentrated, Differentiated Markets," Working Papers 201546, University of Wisconsin-Madison, Department of Agricultural and Applied Economics, Food System Research Group.

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