Price Competition, Non‐Price Competition and Market Structure: Theory and Evidence from the UK

George Symeonidis

Economica, 2000, vol. 67, issue 267, 437-456

Abstract: This paper examines the impact of price competition on advertising/R&Dexpenditure and market structure. A general theoretical result is derived,which restricts the space of possible outcomes regarding the behaviour ofconcentration and advertising/R&D expenditure following anintensification of price competition. The theory is tested using UK data onthe evolution of competition, concentration and advertising over 1954&77. The econometric results suggest that the introduction of restrictive practiceslegislation in the UK caused a rise in concentration in previouslycartelized high‐advertising manufacturing industries and probably also afall in advertising intensity.

Date: 2000
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Persistent link: https://EconPapers.repec.org/RePEc:bla:econom:v:67:y:2000:i:267:p:437-456

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