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| Author: | Fluet, C. Garella, P. G. |
| Title: | Advertising and prices as signals of quality in a regime of price rivalry |
| Journal: | International Journal of Industrial Organization
2002 : SEP, VOL. 20:7, p. 907-930 |
| Index terms: | Advertising Quality Oligopoly |
| Language: | eng |
| Abstract: | The paper addresses the issue of whether firms use price or advertising to signal quality and whether advertising has pro- or anti-competitive effects. The authors show that, when there is price rivalry, advertising may be necessary may necessary to signal quality, in contrast to singel-firm models. Signaling through price alone prevails for sufficient inter-brand quality differentials; joint price-advertising signals prevail when the quality differential is small. |
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