Change search
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf
Informative Advertising in Monopolistically Competitive Markets
Department of Economics, University of Kentucky, Lexington, USA.
Jönköping University, Jönköping International Business School, JIBS, Economics. Jönköping University, Jönköping International Business School, JIBS, Media, Management and Transformation Centre (MMTC).ORCID iD: 0000-0003-4338-908x
2019 (English)Report (Other academic)
Abstract [en]

In their seminal paper, Grossman and Shapiro (1984) find that informative advertising is socially excessive in an oligopoly pure-strategy symmetric equilibrium (PSSE). However, their analysis assumed that every consumer receives at least one advertisement. Christou and Vettas (2008) present counter-examples, showing that if this assumption does not hold, the PSSE advertising may, instead, be insufficient. Christou and Vettas (2008) also show by example that quasiconcavity may not hold in Grossman and Shapiro (1984) and that there may be non-existence due to discontinuities from undercutting, although deriving existence conditions (not derived in Grossman and Shapiro (1984)) is infeasible. We revisit the question by modeling firms (like consumers) as a continuum, which mitigates the discontinuity, enables the derivation of intuitive existence conditions for a PSSE, and allows a general analysis including when some consumers receive no advertisements. More importantly, we find that advertising is always socially insufficient and entry is also insufficient.

Place, publisher, year, edition, pages
2019. , p. 37
Series
MPRA Paper ; 95053
Keywords [en]
informative advertising, product differentiation, monopolistic competition, welfare.
National Category
Business Administration
Identifiers
URN: urn:nbn:se:hj:diva-47144OAI: oai:DiVA.org:hj-47144DiVA, id: diva2:1380038
Available from: 2019-12-18 Created: 2019-12-18 Last updated: 2019-12-18Bibliographically approved

Open Access in DiVA

No full text in DiVA

Other links

Fulltext

Authority records BETA

Manduchi, Agostino

Search in DiVA

By author/editor
Manduchi, Agostino
By organisation
JIBS, EconomicsJIBS, Media, Management and Transformation Centre (MMTC)
Business Administration

Search outside of DiVA

GoogleGoogle Scholar

urn-nbn

Altmetric score

urn-nbn
Total: 24 hits
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf