Advertising Intensity and Welfare in an Equilibrium Search Model

Ian McCarthy

No 2008-003, CAEPR Working Papers from Center for Applied Economics and Policy Research, Department of Economics, Indiana University Bloomington

Abstract: We analyze an equilibrium search model in a duopoly setting with bilateral heterogeneities in production and search costs in which firms can advertise by announcing price and location. We study existence, stability, and comparative statics in such a setting, compare the market advertising level to the socially optimal level, and find conditions in which firms advertise more or less than the social optimum.

Keywords: Search; Advertising; Welfare (search for similar items in EconPapers)
JEL-codes: D21 D43 D83 M37 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2008-01
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Journal Article: Advertising intensity and welfare in an equilibrium search model (2016)
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