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.
- Sprache
-
Englisch
- Erschienen in
-
Series: Quaderni - Working Paper DSE ; No. 400
- Klassifikation
-
Wirtschaft
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Lambertini, Luca
Bertuzzi, Giorgia
- Ereignis
-
Veröffentlichung
- (wer)
-
Alma Mater Studiorum - Università di Bologna, Dipartimento di Scienze Economiche (DSE)
- (wo)
-
Bologna
- (wann)
-
2001
- DOI
-
doi:10.6092/unibo/amsacta/4901
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:44 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Lambertini, Luca
- Bertuzzi, Giorgia
- Alma Mater Studiorum - Università di Bologna, Dipartimento di Scienze Economiche (DSE)
Entstanden
- 2001
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