We incorporate product demonstrations into a game theoretic model of firm price competition. Demonstrations may include product samples, trials, return policies, reviews, or any other means by which a firm allows consumers to learn about their value for a new product. In our model,...

When firms possess information about their competitors’ products, their advertisements may leak extra information. I analyze this within a duopoly television market that lasts for two periods. Each station may advertise its upcoming program by airing a tune-in during the first program. Viewers...

This paper studies how the emergence of specialized communication media focused on both high quality contents and high quality advertised products, affects the functioning of a vertically differentiated market. To that end, we formulate a simultaneous game of pricing and targeted advertising...

This paper investigates the competition between vertically differentiated platforms in two-sided markets. We assume the presence of two competing platforms producing either higher- or lower-quality devices for consumers. Each platform decides the price of its hardware device for consumers and...

In this paper we extend the model of vertical product differentiation to also consider information disparities about the extent of quality differences. Equilibrium prices turn out to depend not only on the share of informed consumers but also on uninformed consumers beliefs about quality...

We consider a market served by a safe and a risky seller. While the expensive safe seller can solve the problems of all consumers, the cheap risky seller can help a consumer only with a certain probability. The risky seller's success probabilities are distributed across consumers, and by the...

In this paper we extend the model of vertical product differentiation to also consider information disparities about the extent of quality differences. Equilibrium prices turn out to depend not only on the share of informed consumers but also on uninformed consumers beliefs about quality...

We study the impact of the Euro on prices charged by online retailers within the EU. Our data spans the period before and after the Euro was introduced, covers a variety of products, and includes countries inside and outside of the Eurozone. After controlling for cost, demand, and market...

This paper analyses the competitive effects of informative advertising. The seminal work by Grossman and Shapiro (1984) show that informative advertising results in lower prices and that firms may benefit from advertising restrictions. A crucial assumption in their model is that captive...