Quality and Advertising in a Dynamic Duopoly

Colombo, Luca ; Lambertini, Luca (2003) Quality and Advertising in a Dynamic Duopoly. DOI 10.6092/unibo/amsacta/610.
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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
DOI
Deposit date
17 Jun 2004
Last modified
17 Feb 2016 13:58
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