Advertising Spillovers and Market Structure
Nada Ben Elhadj,
Rim Lahmandi-Ayed () and
Didier Laussel ()
Recherches économiques de Louvain, 2014, vol. 80, issue 3, 51-98
In this paper we characterize the equilibrium of a duopoly market which exhibits advertising spillovers. Interestingly, we prove that the relevant distinction is not between pure positive and pure negative advertising spillovers but between strong positive spillovers and weakly positive or negative spillovers. Moreover, we prove that, depending on the extent of advertising spillovers and the agency advertising cost, we may obtain at equilibrium either two active advertisers or only one advertiser that may even push its rival out of the product market. Thus advertising and the spillovers induced from it may be a source of a monopoly situation, hence an asymmetric outcome may result from an initially symmetric situation.
Keywords: advertising spillovers; quantity competition; agency cost (search for similar items in EconPapers)
References: Add references at CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Working Paper: Advertising Spillovers and Market Structure (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:cai:reldbu:rel_803_0051
Access Statistics for this article
More articles in Recherches économiques de Louvain from De Boeck Université
Bibliographic data for series maintained by Jean-Baptiste de Vathaire ().