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/subjectarea/asjc/1400/1401

Subjects:

?? product differentiationadvertisingduopolyjel classificationsc7d8l1business, management and accounting (miscellaneous)economics and econometricshb economic theory ??

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:

15 Sep 2024 23:55

URI:

https://eprints.lancs.ac.uk/id/eprint/19876