Informative Advertising with Spillover Effects∗
نویسنده
چکیده
This paper studies the effects of advertising in a Bertrand duopoly model with informative advertising, which is an extension of Grossman and Shapiro (1984). It introduces spillover advertising effects on top of the direct advertising effects. Also, the model involves R&D activities, which make the model dynamical. It is shown that the spillover effects would make the environment more monopolistic: higher prices and profits with lower R&D expenditures.
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