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Advertising and Oligopolistic Equilibrium

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Author Info
James W. Friedman

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Abstract

This article analyzes advertising in an n-firm infinite horizon, differentiated products oligopoly. The firms all choose output and advertising levels in each period, and are assumed to behave noncooperatively. Advertising is characterized in a manner similar to capital: the effects of money spent on advertising today last well into the future. The interfirm advertising effect can be either cooperative or predatory, and in a linear-quadratic version of the model, this degree of cooperativeness is represented by a parameter. Existence and uniqueness of the Nash equilibrium are obtained, along with many comparative statics results.

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Publisher Info
Article provided by The RAND Corporation in its journal Bell Journal of Economics.

Volume (Year): 14 (1983)
Issue (Month): 2 (Autumn)
Pages: 464-473
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Handle: RePEc:rje:bellje:v:14:y:1983:i:autumn:p:464-473

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  1. Ulrich Doraszelski & Sarit Markovich, 2004. "Advertising Dynamics and Competitive Advantage," Computing in Economics and Finance 2004 61, Society for Computational Economics. [Downloadable!]
  2. R. Cellini & L. Lambertini, 2001. "Advertising in a Differential Oligopoly Game," Working Papers 427, Dipartimento Scienze Economiche, Università di Bologna. [Downloadable!]
  3. Richard Schmidtke, 2006. "Private Provision of a Complementary Public Good," Discussion Papers 134, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich. [Downloadable!]
  4. Massimo Motta, 1996. "Advertising Bans," Economics Working Papers 205, Department of Economics and Business, Universitat Pompeu Fabra, revised Jan 1997. [Downloadable!]
    Other versions:
  5. A. Mantovani & G. Mion, 2002. "Advertising and Endogenous Exit in a Differentiated Duopoly," Working Papers 455, Dipartimento Scienze Economiche, Università di Bologna. [Downloadable!]
  6. R. Amir & A. Mantovani, 2003. "Self-organised Criticality and Technological Convergence," Working Papers 470, Dipartimento Scienze Economiche, Università di Bologna. [Downloadable!]
  7. Schmidtke, Richard, 2006. "Private Provision of a Complementary Public Good," Discussion Papers in Economics 964, University of Munich, Department of Economics. [Downloadable!]
  8. Christian Schultz & Ignacio Ortuño Ortín, 2000. "Public Funding Of Political Parties," Working Papers. Serie AD 2000-27, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
    Other versions:
  9. Manel Antelo, 2002. "Complementaries and commitment in a Cournot setting," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 17(1), pages 3-36. [Downloadable!]
  10. Richard Schmidtke, 2006. "Private Provision of a Complementary Public Good," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
  11. R. Joosten, 2007. "Strategic Advertisement with Externalities: A New Dynamic Approach," Papers on Econonmics and Evolution 2007-02, Max Planck Institute of Economics, Evolutionary Economics Group. [Downloadable!]
  12. G. Bertuzzi & L. Lambertini, 2001. "Advertising in a Differential Game of Spatial Competition," Working Papers 400, Dipartimento Scienze Economiche, Università di Bologna. [Downloadable!]
  13. Christian Schultz, 2003. "Strategic Campaigns and Redistributive Politics," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
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