Advertising Collusion in Retail Markets

• Main Authors: BAGWELL, Kyle, LEE, Gea M.
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2010
• Subjects: advertising; collusion; private information; retail markets; Advertising and Promotion Management; Behavioral Economics; Industrial Organization
• Online Access: https://ink.library.smu.edu.sg/soe_research/1173; https://ink.library.smu.edu.sg/context/soe_research/article/2172/viewcontent/bejeap.2010.10.1.2489.pdf
• Institution: Singapore Management University

We analyze non-price advertising by retail firms, when the firms are privately informed about their respective costs of production. In a static advertising game, an advertising equilibrium exists in which lower-cost firms select higher advertising levels. In this equilibrium, informed consumers rati...