Non-comparative and comparative advertising in oligopolistic markets

Maria Alipranti, Evangelos Mitrokostas and Emmanuel Petrakis

No 231, DICE Discussion Papers from Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)

Abstract: We study firms' advertising strategies in an oligopolistic market in which both non-comparative and comparative advertising are present. We show that in equilibrium firms mix over the two types of advertising, with the intensity of comparative advertising exceeding that of non-comparative advertising; moreover, that the intensity of comparative increases relatively to non-comparative advertising as market competition intensifies. Interestingly, the use of comparative advertising may lead to higher consumers' surplus and welfare in a mixed advertising market than in the absence of advertising or when either comparative or non-comparative advertising is not present.

Keywords: Comparative Advertising; Non-comparative advertising; Oligopoly; Product Differentiation (search for similar items in EconPapers)
JEL-codes: L13 M37 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-com, nep-ind, nep-mic and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:dicedp:231

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