Endogenous timing and manufacturer advertising: A note

Qing Hu and Tomomichi Mizuno

Metroeconomica, 2021, vol. 72, issue 2, 309-320

Abstract: We consider a vertical market comprising of a manufacturer engaging in advertising and two retailers offering differentiated products. We analyze the endogenous order of moves for the retailers and demonstrate that they may choose a more competitive environment: simultaneous pricing under Bertrand competition or sequential producing under Cournot competition. This result is robust even if we extended our model to third‐degree wholesale price discrimination and persuasive advertising.

Date: 2021
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