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Dynamic Voluntary Advertising and Vertical Product Quality

Yohei Tenryu and Keita Kamei

MPRA Paper from University Library of Munich, Germany

Abstract: We investigate the dynamic relationship between advertising and product quality under duopolistic competition. By using a simplified vertical product differentiation model with voluntary advertising, we show that the firm with larger market share has a larger advertising share and that there is a positive relationship between the difference in product quality and the number of customers in an industry.

Keywords: Advertising; product quality; differential games; duopoly (search for similar items in EconPapers)
JEL-codes: C72 L13 (search for similar items in EconPapers)
Date: 2012-12-01
New Economics Papers: this item is included in nep-bec, nep-com and nep-mkt
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Journal Article: Dynamic voluntary advertising and vertical product quality (2013) Downloads
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