Purpose – The effects of social learning and network externalities in the diffusion of a new product imply that there should be local spillovers from existing owners to new adopters in a closely-related community. Using the data from a unique household survey in rural China, this paper...

In this paper, we analyze the impact of advertising and quality decisions on price competition in a duopoly setting. Firms are able to differentiate their products vertically and use persuasive advertising to increase consumer brand loyalty. The model predicts that the high quality firm will...