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Dynamic voluntary advertising and vertical product quality

Yohei Tenryu () and Keita Kamei
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Yohei Tenryu: Graduate School of Economics, Kyoto University

Economics Bulletin, 2013, vol. 33, issue 1, 564-574

Abstract: We investigate the dynamic relationship between advertising and product quality under duopolistic competition. By using a simplified vertical product differentiation model with voluntary advertising, we show that the firm with larger market share has a larger advertising share and that there is a positive relationship between the difference in product quality and the number of customers in an industry.

Keywords: Advertising; product quality; differential games; duopoly. (search for similar items in EconPapers)
JEL-codes: L0 (search for similar items in EconPapers)
Date: 2013-03-04
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Working Paper: Dynamic Voluntary Advertising and Vertical Product Quality (2012) Downloads
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