A generalization of the Dorfman-Steiner Formula: Advertising spillovers under imperfect competition

Takanori Adachi

Economics Bulletin, 2020, vol. 40, issue 2, 1300-1307

Abstract: By using Weyl and Fabinger's (2013) conduct parameter approach, this note generalizes the Dorfman-Steiner formula to include the case of imperfect competition and advertising spillovers, and thereby extends Forbes' (1986) analysis of quantity competition. Furthermore, this generalization also allows the possibility of coordinated/collusive pricing by introducing Edgeworth's (1881) “coefficient of sympathy†as its micro-foundation, and generalizes Lambin's (1970) and Schmalensee's (1972) expressions of the Dorfman-Steiner formula in oligopoly.

Keywords: Dorfman-Steiner Formula; Imperfect Competition; Conduct Parameter; Advertising Spillovers; Collusive Pricing (search for similar items in EconPapers)
JEL-codes: L1 M3 (search for similar items in EconPapers)
Date: 2020-05-09
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