Dynamic Advertising with Spillovers: Cartel vs Competitive Fringe

Luca Lambertini () and Arsen Palestini ()
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Arsen Palestini: University of Bologna, Italy

Working Paper Series from Rimini Centre for Economic Analysis

Abstract: A differential oligopoly game with advertising is investigated, where different dynamics occur between two groups of agents, the former playing a competitive Nash game and the latter cooperating as a cartel. Sufficient conditions for stability and a qualitative analysis of the profit ratio and social welfare at equilibrium are provided. A threshold value for the size of the competitive fringe is pointed out by a suitable numerical simulation.

Keywords: Advertising; Differential games; Oligopoly; Collusion (search for similar items in EconPapers)
JEL-codes: C73 D43 D92 L13 M37 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-gth, nep-ind, nep-mic and nep-mkt
Date: 2007-07, Revised 2007-07

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Persistent link: http://EconPapers.repec.org/RePEc:rim:rimwps:48-07

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