The Advertising Market in a Product Oligopoly

22 Pages Posted: 9 Oct 2004

See all articles by Anthony J. Dukes

Anthony J. Dukes

University of Southern California - Marshall School of Business

Abstract

A model is developed in which producers in a differentiated product market compete in prices and informative advertising. The model also includes commercial media, which are linked to producers through the advertising market and to consumers through the media market. We investigate how certain market parameters, such as media market differentiation or product market differentiation, affect the competitive level advertising chosen in the market. The model shows that less product differentiation or more media differentiation leads to a higher market level of advertising. In the case of sufficiently high media differentiation, levels of advertising are in excess of the social optimum.

Suggested Citation

Dukes, Anthony J., The Advertising Market in a Product Oligopoly. Journal of Industrial Economics, Vol. 52, No. 3, pp. 327-348, September 2004. Available at SSRN: https://ssrn.com/abstract=595097

Anthony J. Dukes (Contact Author)

University of Southern California - Marshall School of Business ( email )

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