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Review of Industrial Organization

, Volume 11, Issue 1, pp 93–105 | Cite as

Brand versus generic advertising and the decision to advertise collectively

  • Catherine Carey
  • Dawn Langkamp Bolton
Article

Abstract

This study uses Lancaster's (1966, 1979) characteristics model of consumer theory, combined with imperfect information, to support a firm's advertising choice of a combination of brand and generic advertising. However, as consumers become well educated about a firm's product, spillovers from generic advertising become large. When spillovers are large, firms have a greater incentive to collude on generic advertising. The firm's decision to include advertising collectively with its competitors will follow from its own analysis of the benefits versus the costs of such a union. The success of collective advertising may, however, depend on the control of free-riders.

Key words

Advertising brand generic collusion spillovers 

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Copyright information

© Kluwer Academic Publishers 1996

Authors and Affiliations

  • Catherine Carey
    • 1
  • Dawn Langkamp Bolton
    • 2
  1. 1.Department of EconomicsWestern Kentucky UniversityBowling GreenU.S.A.
  2. 2.Department of MarketingWestern Kentucky UniversityBowling GreenU.S.A.

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