Quality and Advertising in a Dynamic Duopoly

Colombo, Luca ; Lambertini, Luca (2003) Quality and Advertising in a Dynamic Duopoly. Bologna: Dipartimento di Scienze economiche DSE, p. 17. DOI 10.6092/unibo/amsacta/4804. In: Quaderni - Working Paper DSE (490). ISSN 2282-6483.
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Abstract

We investigate a differential duopoly game where each firm, through capital accumulation over time, may invest both in persuasive advertising campaigns aimed at increasing the willingness to pay of consumers and in an R&D process aimed at increasing the level of own product quality. In contrast with the acquired wisdom based on static models, the firm providing the market with the inferior variety may earn higher profits than the rival. More than this, we show that there exists a range of parameters wherein the low quality firm commands monopoly power.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Colombo, Luca
Lambertini, Luca
Keywords
advertising, quality, differential games
Subjects
ISSN
2282-6483
DOI
Deposit date
09 Mar 2016 15:04
Last modified
09 Mar 2016 15:04
URI

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