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Unpublished Paper
Misleading Advertising in Duopoly
Kwansei Gakuin University Discussion Paper Series (2011)
  • Keisuke Hattori
  • Keisaku Higashida
Abstract
In this paper, we build 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, behavior 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 advertis- ing, educating consumers, taxing production, and taxing misleading advertising. We then extend the model by introducing two types of heterogeneities; heterogeneous consumers and heterogeneous production costs between firms.
Keywords
  • Misleading advertising,
  • Regulation,
  • Duopoly,
  • Product Differentiation,
  • Advertising externality
Publication Date
2011
Citation Information
Keisuke Hattori and Keisaku Higashida. "Misleading Advertising in Duopoly" Kwansei Gakuin University Discussion Paper Series (2011)
Available at: http://works.bepress.com/hattori/5/