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- W93934439 abstract "In this paper, we investigate the strategic interaction between competing pharmaceutical firms after one firm, Crestor, suffers bad news and faces the threat of exit. A game theoretical analysis shows that its competitor, having superior information about the market condition, distorts its advertising level upward with the intention of inducing Crestor to exit. Moreover, such distortion only happens with those physicians whose preference for Crestor prior to the bad news event fell within the median range. We empirically test our prediction using physician-level data. Our major finding is that Crestor’s main competitor, Lipitor, increased its advertising intensity the most among those physicians with whom Crestor already had a median market share of total prescriptions. Such a pattern is not found with other smaller competitors of Crestor. This result supports the theoretical prediction of predation. Our work offers an alternative method for detecting predatory intent against normal competitive responses." @default.
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- W93934439 date "2007-01-01" @default.
- W93934439 modified "2023-09-27" @default.
- W93934439 title "Predatory Advertising: Theory and Evidence in the Pharmaceutical Industry ∗" @default.
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