Advertising and entry deterrence: how the size of the market matters
Khaled Bennour ()
MPRA Paper from University Library of Munich, Germany
Abstract:
Schmalensee (1974) shows that, when the cost functions of the advertising e¤ort are linear, the monopoly position is only sustained when the advertising�s e¤ectiveness of the incumbent is relatively high. We show that this result does not hold in a more general nonlinear cost. The no-entry equilibrium may hold even when the relative e¤ectiveness of the incumbent is low. This happens when the size of the market is su¢ ciently low.
Keywords: Advertising; Entry; Market seize (search for similar items in EconPapers)
JEL-codes: D43 (search for similar items in EconPapers)
Date: 2006, Revised 2007-02-07
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Citations: View citations in EconPapers (1)
Published in International Journal of Business and Economics 3.6(2007): pp. 199-206
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Related works:
Journal Article: Advertising and Entry Deterrence: How the Size of the Market Matters (2007) 
Working Paper: Advertising and Entry Deterrence: How the Size of the Market Matters (2007) 
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:17233
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