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Caught in a stranglehold? advertising: What else?

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Research output: Contribution to journalArticlepeer-review

Abstract

I analyze a quality signaling problem by a monopoly introducing a new experience good. A high-quality type aims to signal itself to consumers but can be imitated by a low-quality type with either a low or a high cost. In the unique separating equilibrium after deletion of dominated strategies, the high-quality type separates through a marketing mix of price and dissipative advertising. Advertising is used despite the absence of repeat purchases or informed consumers.

Original languageEnglish
Pages (from-to)63-80
Number of pages18
JournalManchester School
Volume79
Issue number1
DOIs
Publication statusPublished - 1 Jan 2011
Externally publishedYes

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