Strategic Advertising: Fat-Cat Effect and Stability

Posted: 6 Nov 2006

See all articles by Hamid Beladi

Hamid Beladi

University of Texas at San Antonio - College of Business - Department of Economics

Reza Oladi

Utah State University - College of Business - Department of Economics

Abstract

In this paper we use the theory of social situations (TOSS) to examine the stability in advertising and (price) competition games. In this context, we derive the interesting result that with endogenous and exogenous advertising the incumbent need not maintain a hungry-look, i.e., under-investment in advertising expenditure, in order to deter entry.

Keywords: Advertising, competition, market structure, theory of social situations

JEL Classification: C7, D4, M0

Suggested Citation

Beladi, Hamid and Oladi, Reza, Strategic Advertising: Fat-Cat Effect and Stability. Mathematical Social Sciences, Vol. 51, pp. 153-161, 2006. Available at SSRN: https://ssrn.com/abstract=938629

Hamid Beladi

University of Texas at San Antonio - College of Business - Department of Economics ( email )

One UTSA Circle
P.O. Box 5636
San Antonio, TX 78249
United States
210-458-7038 (Phone)
210-458-7040 (Fax)

Reza Oladi (Contact Author)

Utah State University - College of Business - Department of Economics ( email )

3530 Old Main Hill
Logan, UT 84322-3530
United States

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