The sleeper effect of comparative advertising in oligopolistic markets

Rabah Amir, Dominika Machowska and Andrzej Nowakowski

Journal of Economic Dynamics and Control, 2025, vol. 177, issue C

Abstract: This research deals with comparative advertising strategies of firms in an oligopolistic market in the presence of the sleeper effect, through the lens of a differential game with time delay. We examine the open-loop Nash equilibrium and, for its validation, propose a new verification theorem that determines if a given strategy profile constitutes a Nash equilibrium. Our results reveal how the sleeper effect influences the equilibrium of comparative advertising strategies across two decision-making periods. Moreover, we highlight how market factors and firm attributes can significantly affect these strategies and derive conditions under which a firm will abstain from such strategies. Overall, our study provides novel insights into how market dynamics, firm attributes, and the sleeper effect interact in shaping comparative advertising strategies.

Keywords: Comparative advertising; Sleeper effect; Open-loop Nash equilibrium; Verification theorem; Differential game with time delay (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:dyncon:v:177:y:2025:i:c:s0165188925000880

DOI: 10.1016/j.jedc.2025.105122

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