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- W4366292793 abstract "Abstract In the Milgrom‐Roberts's advertising model, introducing the possibility to die before customers' repurchase alters the firm's advertising incentive to signal hidden product quality. Two opposing forces result, one mechanical and the other strategic. Depending on their relative strengths, the equilibrium advertising can either rise or fall. To the extent that competition threatens firms' survival, our result explains the mixed findings on the causal effects of competition on advertising. Introducing firm deaths in their model offers a new test of whether advertising signals quality, still an unsettled empirical question since Nelson first articulates advertising as a signal in 1974." @default.
- W4366292793 created "2023-04-20" @default.
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- W4366292793 date "2023-04-17" @default.
- W4366292793 modified "2023-10-16" @default.
- W4366292793 title "Does competition increase advertising?" @default.
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- W4366292793 doi "https://doi.org/10.1002/mde.3874" @default.
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