Equilibrium Distribution of Advertising Prices
This paper formulates a model of advertising prices in which a homogeneous product is not intended for sales at conventional stores. The product is sold by means of advertising instead. Applications of this model can be found on numerous sales activities include, for example, insurance companies, television shopping channels and Internet e-tailers who advertise their products and prices by sending e-mails to potential buyers or by means of popup windows. This paper makes endogenous both firm advertising and price strategies in the model.
KeywordsEquilibrium Distribution Price Dispersion Advertising Strategy Popup Window Advertising Cost
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