Misleading Advertising in Duopoly

Keisuke Hattori and Keisaku Higashida

No 69, Discussion Paper Series from School of Economics, Kwansei Gakuin University

Abstract: In this paper, we build a model of strategic misleading advertising in duopolistic markets with horizontal product differentiation and advertising externality between firms. We investigate the effects of regulating misinformation on market competition, behavior of firms, and social welfare. We show that the degree of advertising externality and the magnitude of advertising costs are crucial for determining the welfare effects of several regulations, including prohibiting misleading advertising, educating consumers, taxing production, and taxing misleading advertising. We then extend the model by introducing two types of heterogeneities; heterogeneous consumers and heterogeneous production costs between firms.

Keywords: Misleading Advertising, Regulation; Duopoly, Product Differentiation, Advertising Externality (search for similar items in EconPapers)
JEL-codes: L13 L15 M37 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2011-03, Revised 2011-03
New Economics Papers: this item is included in nep-bec, nep-com, nep-ind, nep-mkt and nep-reg
References: View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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http://192.218.163.163/RePEc/pdf/kgdp69.pdf First version, 2011 (application/pdf)

Related works:
Journal Article: Misleading advertising in duopoly (2012)
Journal Article: Misleading advertising in duopoly (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:kgu:wpaper:69

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