Non-comparative versus Comparative Advertising as a Quality Signal

Winand Emons and Claude Fluet

No 7109, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Two firms produce a product with a horizontal and a vertical characteristic. We call the vertical characteristic quality. The difference in the quality levels determines how the firms share the market. Firms know the quality levels, consumers do not. Under non-comparative advertising a firm may signal its own quality. Under comparative advertising firms may signal the quality differential. In both scenarios the firms may attempt to mislead at a cost. If firms advertise, in both scenarios equilibria are revealing. Under comparative advertising the firms never advertise together which they may do under non-comparative advertising.

Keywords: Advertising; Costly state falsification; Signalling (search for similar items in EconPapers)
JEL-codes: D82 K41 K42 (search for similar items in EconPapers)
Date: 2009-01
New Economics Papers: this item is included in nep-com, nep-cta, nep-law, nep-mic and nep-mkt
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Related works:
Working Paper: Non-comparative versus Comparative Advertising as a Quality Signal (2011)
Working Paper: Non-comparative versus Comparative Advertising as a Quality Signal (2009)
Working Paper: Non-comparative versus Comparative Advertising as a Quality Signal (2008)
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