Comparative advertising: disclosing horizontal match information

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Comparative Advertising: disclosing horizontal match information

Improved consumer information about horizontal aspects of products of similar quality leads to better consumer matching but also higher prices, so consumer surplus can go up or down, while proÞts rise. With enough quality asymmetry though, the higher quality (and hence larger) Þrm’s price falls with more information, so both effects beneÞt consumers. This is when comparative advertising is used...

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Comparative Advertising

A firm introduces a product and consumers do not know how much they value it, while they know how they value a rival’s product. If the product is low quality, the firm will advertise detailed product information that enables consumers to determine their matches: it will not if it is high quality. By contrast, the rival would like to advertise match information about the unknown product only if ...

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ژورنال

عنوان ژورنال: The RAND Journal of Economics

سال: 2009

ISSN: 0741-6261,1756-2171

DOI: 10.1111/j.1756-2171.2009.00077.x