Strategic Targeted Advertising and Market Fragmentation

Lola Esteban () and Jose M. Hernandez ()
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Lola Esteban: University of Zaragoza
Jose M. Hernandez: University of Zaragoza

Economics Bulletin, 2007, vol. 12, issue 10, 1-12

Abstract: This paper proves that oligopolistic price competition with both targeted advertising and targeted prices can lead to a permanent fragmentation of the market into a local monopoly. However, compared to mass advertising, targeting increases social welfare and turns out to be more beneficial for consumers than for firms.

Keywords: discount; coupons. (search for similar items in EconPapers)
JEL-codes: L1 (search for similar items in EconPapers)
Date: 2007-05-21
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Citations: View citations in EconPapers (12)

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