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 language | English |
|---|---|
| Pages (from-to) | 63-80 |
| Number of pages | 18 |
| Journal | Manchester School |
| Volume | 79 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - 1 Jan 2011 |
| Externally published | Yes |
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