Advertising Intensity and Welfare in an Equilibrium Search Model

31 Pages Posted: 31 Jan 2008 Last revised: 27 Apr 2016

See all articles by Ian M. McCarthy

Ian M. McCarthy

Emory University - Department of Economics

Date Written: February 11, 2016

Abstract

We analyze an equilibrium search model in a duopoly setting with bilateral heterogeneities in production and search costs in which firms can advertise by announcing price and location. We study existence, stability, and comparative statics in such a setting, compare the market advertising level to the socially optimal level, and find conditions in which firms advertise more or less than the social optimum.

Keywords: Search, Advertising, Welfare

JEL Classification: D21, D43, D83, M37

Suggested Citation

McCarthy, Ian M., Advertising Intensity and Welfare in an Equilibrium Search Model (February 11, 2016). Economics Letters, Vol. 141, 2016, Available at SSRN: https://ssrn.com/abstract=1087416 or http://dx.doi.org/10.2139/ssrn.1087416

Center for Applied Economics And Policy Research (Contact Author)

Indiana University Bloomington - Department of Economics

Wylie Hall
Bloomington, IN 47405-6620
United States

Ian M. McCarthy

Emory University - Department of Economics ( email )

1602 Fishburne Drive
Atlanta, GA 30322
United States

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