Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/48713
Authors: 
Emons, Winand
Fluet, Claude
Year of Publication: 
2011
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2011: Die Ordnung der Weltwirtschaft: Lektionen aus der Krise - Session: Advertising and Marketing Campaigns D12-V3
Abstract: 
Two firms produce a product with a horizontal and a vertical characteristic that we call quality. The difference in the quality levels determines how the firms share the market. Consumers do not observe quality before purchase. Under non-comparative advertising a firm signals its own quality, under comparative advertising a firm signals the quality differential. In both scenarios firms may boast at a cost. In equilibrium firms actually do so, but consumers rationally infer the true quality if firms advertise. Under comparative advertising the firms never advertise together which they may do under non-comparative advertising.
Subjects: 
advertising
costly state falsification
signalling
JEL: 
D82
L15
M37
Document Type: 
Conference Paper

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