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A generalization of the Dorfman-Steiner Formula: Advertising spillovers under imperfect competition

Author

Listed:
  • Takanori Adachi

    (School of Economics, Nagoya University)

Abstract

By using Weyl and Fabinger's (2013) conduct parameter approach, this note generalizes the Dorfman-Steiner formula to include the case of imperfect competition and advertising spillovers, and thereby extends Forbes' (1986) analysis of quantity competition. Furthermore, this generalization also allows the possibility of coordinated/collusive pricing by introducing Edgeworth's (1881) “coefficient of sympathy†as its micro-foundation, and generalizes Lambin's (1970) and Schmalensee's (1972) expressions of the Dorfman-Steiner formula in oligopoly.

Suggested Citation

  • Takanori Adachi, 2020. "A generalization of the Dorfman-Steiner Formula: Advertising spillovers under imperfect competition," Economics Bulletin, AccessEcon, vol. 40(2), pages 1300-1307.
    • Handle: RePEc:ebl:ecbull:eb-19-01050
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2020/Volume40/EB-20-V40-I2-P111.pdf
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    References listed on IDEAS

    as
    1. Adachi, Takanori, 2020. "Hong and Li meet Weyl and Fabinger: Modeling vertical structure by the conduct parameter approach," Economics Letters, Elsevier, vol. 186(C).
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    More about this item

    Keywords

    Dorfman-Steiner Formula; Imperfect Competition; Conduct Parameter; Advertising Spillovers; Collusive Pricing;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • M3 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising

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