Equilibrium Price and Advertisement Distributions
| Autor: | Teemu Pekkarinen, Klaus Kultti |
|---|---|
| Přispěvatelé: | Helsinki Institute of Sustainability Science (HELSUS), Doctoral Programme in Economics, Helsinki Center of Economic Research (HECER) 2010-2012, Economics |
| Rok vydání: | 2019 |
| Předmět: |
TheoryofComputation_MISCELLANEOUS
Economics and Econometrics Class (computer programming) Applied Mathematics 05 social sciences TheoryofComputation_GENERAL Advertising WAGE Unit (housing) Unit demand 0502 economics and business 111 Mathematics 511 Economics ComputingMilieux_COMPUTERSANDSOCIETY 050206 economic theory Price distributions Information flow (information theory) Business 512 Business and Management 050207 economics ComputingMilieux_MISCELLANEOUS 050205 econometrics |
| Zdroj: | SSRN Electronic Journal. |
| ISSN: | 1556-5068 |
| DOI: | 10.2139/ssrn.3479074 |
| Popis: | We consider an economy where many sellers sell identical goods to many buyers. Each seller has a unit supply and each buyer has a unit demand. The only possible information flow about prices is through costly advertising. We show that in equilibrium the sellers use mixed strategies in pricing which leads to price and advertisement distributions. With convex advertising costs each seller sends only one advertisement in the market. We also delineate a class of advertising costs which ensures that sellers may send multiple advertisements in equilibrium. Higher prices are advertised more than lower prices. (C) 2021 The Author(s). Published by Elsevier B.V. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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