Non-comparative versus Comparative Advertising as a Quality Signal

Emons, Winand; Fluet, Claude (December 2008). Non-comparative versus Comparative Advertising as a Quality Signal (Discussion Papers 08-05). Bern: Department of Economics

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Two firms produce a product with a horizontal and a vertical characteristic. We call the vertical characteristic quality. The difference in the quality levels determines how the firms share the market. Firms know the quality levels, consumers do not. Under non-comparative
advertising a firm may signal its own quality. Under comparative advertising firms may signal the quality differential. In both scenarios the firms may attempt to mislead at a cost. If firms advertise, in both scenarios equilibria are revealing. Under comparative advertising the firms never advertise together which they may do under non-comparative advertising.

Item Type:

Working Paper

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Economics

UniBE Contributor:

Emons, Winand and Fluet, Claude

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

Series:

Discussion Papers

Publisher:

Department of Economics

Language:

English

Submitter:

Lars Tschannen

Date Deposited:

07 Oct 2020 15:17

Last Modified:

07 Oct 2020 15:17

JEL Classification:

D82, K41, K42

BORIS DOI:

10.7892/boris.145714

URI:

https://boris.unibe.ch/id/eprint/145714

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