Competitive Framing∗
نویسنده
چکیده
I present a simple framework for modeling two-firm market competition, where each firm chooses a market alternative as well as a costless “marketing message”. Consumers follow a frame-dependent choice function, where the frame is a probabilistic function of the firms’ marketing messages. This framework embeds several recent models in the literature on markets with boundedly rational consumers. I identify a property that consumer choice may satisfy, which extends the concept of Weighted Regularity due to Piccione and Spiegler (2012), and provide a characterization of Nash equilibria under this property. I use this result to analyze the equilibrium interplay between competition and framing in a large variety of models that fall into the framework.
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