Arbeitspapier
Advertising in a Differential Game of Spatial Competition
We investigate a dynamic duopoly game with horizontal product differentiation, to show that the standard approach to spatial competition fails to produce a pure strategy equilibrium in prices when treated in a differential game framework. This holds independently of the shape of the transportation cost function. Then, we introduce an endogenous costs associated with the choice of location and characterize the open-loop and closed-loop equilibria of the model, showing that in the closed-loop case firms invest more in product differentiation and less in advertising, than they do in the open-loop setting. This happens because the gains from product differentiation can be more easily internalised than those associated with advertising.
- Language
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Englisch
- Bibliographic citation
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Series: Quaderni - Working Paper DSE ; No. 400
- Classification
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Wirtschaft
- Event
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Geistige Schöpfung
- (who)
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Lambertini, Luca
Bertuzzi, Giorgia
- Event
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Veröffentlichung
- (who)
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Alma Mater Studiorum - Università di Bologna, Dipartimento di Scienze Economiche (DSE)
- (where)
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Bologna
- (when)
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2001
- DOI
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doi:10.6092/unibo/amsacta/4901
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Lambertini, Luca
- Bertuzzi, Giorgia
- Alma Mater Studiorum - Università di Bologna, Dipartimento di Scienze Economiche (DSE)
Time of origin
- 2001
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Platform Stickiness in a Spatial Voting Model
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