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    Coordination in Markets with Consumption Externalities: The Role of Advertising and Product Quality


    Pastine, Ivan and Pastine, Tuvana (2011) Coordination in Markets with Consumption Externalities: The Role of Advertising and Product Quality. The Manchester School, 79 (1). pp. 45-62.

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    Abstract

    In this paper we study advertising in markets with positive consumption externalities. In such markets, we show that firms may engage in adver- tising competition to coordinate consumer expectations on their own brand as long as they produce goods of similar quality. The firm with the lower-quality product has a greater incentive to advertise. Hence in equi- librium, the lower-quality product will often be more popular

    Item Type: Article
    Keywords: Markets; Consumption Externalities; Advertising; Product Quality;
    Academic Unit: Faculty of Social Sciences > Economics, Finance and Accounting
    Item ID: 5014
    Identification Number: 0.1111/j.1467-9957.2010.02186.x
    Depositing User: Tuvana Pastine
    Date Deposited: 11 Jun 2014 13:40
    Journal or Publication Title: The Manchester School
    Publisher: Blackwell Publishing Ltd
    Refereed: Yes
    URI:

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