产业组织理论授课课件-IO-slides-advertising.pptVIP

Advertising Basics Provided by someone with a definite agenda, but not necessarily the producer of the product. Provided free -- you do not pay directly for the advertising. Not free to the firms, so there must be some benefit to them -- increased profit. In general, industries with highest levels of advertising also consumer good industries with highest profits. Advertising as Product Differentiation Advertising as a wasteful, rent-seeking behavior. Once products are differentiated in the eyes of the consumer, the firms gain market power. Classic monopolistically competitive model. Price wil