Strategic Advertising: Fat-Cat Effect and Stability
Posted: 6 Nov 2006
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: Suggested Citation