Vertical product differentiation and advertising.

Elliott, Caroline (2004) Vertical product differentiation and advertising. International Journal of the Economics of Business, 11 (1). pp. 37-53. ISSN 1357-1516

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Abstract

A duopoly model is developed in which firms’ strategic variables include brand quality, the number of distinct market segments to enter and price. Informative advertising is used to overcome consumer ignorance about brands. In contrast to many existing models in which firms engage in price competition, the subgame perfect equilibria of the game are not characterised by the production of vertically differentiated products. Further, whilst the firms typically produce identical high quality products, in some circumstances the production of homogeneous low quality brands can be an equilibrium strategy.

Item Type: Journal Article
Journal or Publication Title: International Journal of the Economics of Business
Additional Information: The final, definitive version of this article has been published in the Journal, International Journal of the Economics of Business, 11 (1), 2004, © Informa Plc
Uncontrolled Keywords: /dk/atira/pure/researchoutput/libraryofcongress/hb
Subjects:
Departments: Lancaster University Management School > Economics
ID Code: 19876
Deposited By: Dr Caroline Elliott
Deposited On: 29 Apr 2009 13:43
Refereed?: Yes
Published?: Published
Last Modified: 19 Aug 2019 00:20
URI: https://eprints.lancs.ac.uk/id/eprint/19876

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