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Endogenous timing and manufacturer advertising: A note
Author(s) -
Hu Qing,
Mizuno Tomomichi
Publication year - 2021
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/meca.12321
Subject(s) - cournot competition , competition (biology) , order (exchange) , bertrand competition , economics , microeconomics , advertising , price discrimination , oligopoly , industrial organization , business , ecology , finance , biology
We consider a vertical market comprising of a manufacturer engaging in advertising and two retailers offering differentiated products. We analyze the endogenous order of moves for the retailers and demonstrate that they may choose a more competitive environment: simultaneous pricing under Bertrand competition or sequential producing under Cournot competition. This result is robust even if we extended our model to third‐degree wholesale price discrimination and persuasive advertising.