Inverted-U aggregate investment curves in a dynamic game of advertising

Lambertini, Luca ; Zaccour, Georges (2014) Inverted-U aggregate investment curves in a dynamic game of advertising. Bologna: Dipartimento di Scienze economiche, p. 21. DOI 10.6092/unibo/amsacta/4047. In: Quaderni - Working Paper DSE (954). ISSN 2282-6483.
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Abstract

We revisit the relationship between market power and firms' investment incentives in a noncooperative differential oligopoly game in which firms sell differentiated goods and invest in advertising to increase the brand equity of their respective goods. The feedback equilibrium obtains under open-loop rules, and aggregate expenditure on goodwill takes an inverted-U shape under both Cournot and Bertrand behaviour, provided product differentiation is sufficiently high. Total industry expenditure is higher under Cournot competition.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Lambertini, Luca
Zaccour, Georges
Keywords
Goodwill, Oligopoly, Advertising, Differential games, Schumpeterian hypothesis
Subjects
ISSN
2282-6483
DOI
Deposit date
10 Jul 2014 15:22
Last modified
16 Mar 2015 14:56
URI

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