Download This PaperAdvertising Intensity and Welfare in an Equilibrium Search Model
31 Pages Posted: 31 Jan 2008 Last revised: 22 Sep 2022
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: 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
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