Random Advertising and Monopolistic Price Dispersion

B-Tier
Journal: Journal of Economics & Management Strategy
Year: 1994
Volume: 3
Issue: 3
Pages: 545-559

Score contribution per author:

2.011 = (α=2.01 / 1 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We investigate the role of price advertising in a market where consumers are imperfectly informed about prices. We consider a monopolist whose demand depends on price and advertising expenditure. This demand function is derived from optimizing behavior of consumers. Uninformed consumers may pay a cost to visit the seller and obtain price information. Advertising enables the monopolist to increase the number of informed consumers. In equilibrium the uninformed consumers form rational price expectations, and the seller necessarily adopts a random pricing and advertising strategy.

Technical Details

RePEc Handle
repec:bla:jemstr:v:3:y:1994:i:3:p:545-559
Journal Field
Industrial Organization
Author Count
1
Added to Database
2026-01-24