THE IMPACT OF ADVERTISING IN A DUOPOLY GAME

Lambert Schoonbeek and Peter Kooreman ()
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Peter Kooreman: Department of Economics, Tilburg University, P.O. Box 90153, 5000 LE Tilburg, The Netherlands

International Game Theory Review (IGTR), 2007, vol. 09, issue 04, 565-581

Abstract: We investigate the impact of advertising in a static differentiated duopoly. First, we consider the Nash equilibrium if firms compete with both prices and advertising. Second, we examine the Nash equilibrium if firms only compete in prices and do not advertise. We characterize the circumstances in which the profit, output, and/or price of each firm is greater (or smaller) with advertising than without advertising.

Keywords: Advertising; differentiated duopoly; profits; advertising ban (search for similar items in EconPapers)
JEL-codes: B4 C0 C6 C7 D5 D7 M2 (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (4)

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DOI: 10.1142/S0219198907001606

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