This paper studies the role of advertising and prices as signals of quality in a purely static setting, where repeat … purchases are suppressed altogether, but where advertising affects demand directly. We first show, under standard regularity … assumptions, that the high-quality firm will distort its price upwards and its level of advertising downwards compared to the …

This paper provides a formal analysis of persuasive advertising when firms compete for consumers with heterogenous …-enhancing effect of persuasive advertising varies across consumers and increases in the average degree of conformity. In equilibrium …, both quality and cost leaders choose higher advertising intensities and charge higher prices than their competitors. In …

quality; in the second one, they send costly signals thereof. Under non-comparative advertising a firm advertises its own … quality, under comparative advertising a firm advertises the quality differential. In either scenario, under comparative … advertising the firms never advertise together which they may do under non-comparative advertising. Moreover, under comparative …

provides different information. We find: i) brands with inherently better characteristics (e.g. faster relief) transmit more … negatively associated with the amount of information content; iv) a higher market share of the generic version of a brand is also … associated with less information by the brand. Not controlling for endogeneity of market share and the decision to use …

This paper analyzes persuasive advertising and pricing in oligopoly if firms sell differentiated products and consumers … that the demand-enhancing effect of persuasive advertising varies across consumers and increases in the average degree of … conformity. In equilibrium, both quality and cost leaders choose higher advertising intensities and charge higher prices than …

incumbent can use both price and advertising as signals. I show that potential entry is socially beneficial and that the … separating equilibrium may involve a positive amount of "dissipative" advertising. …

This paper analyzes persuasive advertising and pricing in oligopoly if firms sell differentiated products and consumers … the demand-enhancing effect of persuasive advertising varies across consumers and increases in the average degree of … conformity. In equilibrium, both quality and cost leaders choose higher advertising intensities and charge higher prices than …

I compare the outcome when firms semicollude on advertising to the outcome in the Grossman and Shapiro (1984) model of … informative advertising. I show that advertising is lower but prices and profits are higher under semicollusion on advertising. I … also show that semicollusion on advertising is detrimental to welfare. Although firms earn higher profits when colluding on …

rationalizing quality-equivalent line extensions. Under competition, both average quality and market coverage are (weakly) higher … but monopoly can yield higher welfare than competition. …