Informative Advertising and Product Match

Authors

Michael J. Meurer, Boston University School of LawFollow
Dale Stahl, The University of Texas at AustinFollow

Document Type

Article

Publication Date

3-1994

ISSN

0167-7187

Publisher

Elsevier

Language

en-US

Abstract

This paper studies informative advertising in a variety of market structures for which some consumers are informed about two differentiated products while other consumers are uninformed. We characterize a unique symmetric subgame perfect Nash equilibrium in advertising and pricing. and analyze the welfare properties of the equilibrium. Remarkably, total surplus 5s non-monotonic m advertising. In a duopoly market, the equilibrium level of advertising may be more or less than socially optimal. We also study the effect of a trade association. and compare these results with the first-best solution and a multiproduct monopolist.

Recommended Citation

Michael J. Meurer & Dale Stahl, Informative Advertising and Product Match , in 12 International Journal of Industrial Organization 1 (1994).
Available at: https://doi.org/10.1016/0167-7187(94)90023-X