Premium
Publicité mensongère dans un duopole .
Author(s) -
Hattori Keisuke,
Higashida Keisaku
Publication year - 2012
Publication title -
canadian journal of economics/revue canadienne d'économique
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 69
eISSN - 1540-5982
pISSN - 0008-4085
DOI - 10.1111/j.1540-5982.2012.01730.x
Subject(s) - informative advertising , advertising , duopoly , competition (biology) , externality , product (mathematics) , product differentiation , production (economics) , business , strategic complements , consumer welfare , economics , welfare , native advertising , microeconomics , online advertising , the internet , cournot competition , market economy , ecology , geometry , mathematics , world wide web , computer science , biology
This paper builds 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, behaviour 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 extend the model by introducing heterogeneous consumers, heterogeneous production costs between firms, and the degree of advertising informativeness. Our results have important policy implications for the debate regarding regulation of advertising, especially direct‐to‐consumer advertising for prescription and over‐the‐counter drugs.