We extend the theory of advertising as a quality signal using a model where an entrant can choose to advertise by comparing its product to that of an established incumbent. Comparative advertising, comparing quality of one's own product to that of a rival's, empowers the latter to file for court intervention if it believes the comparison to be false or misleading. We show that comparative advertising can be a signal in instances where generic advertising is not viable.
With a Little Help from my Enemy : Comparative Advertising as a Signal of Quality / F. Barigozzi, P. Garella, M. Peitz. - In: JOURNAL OF ECONOMICS & MANAGEMENT STRATEGY. - ISSN 1058-6407. - 18:4(2009 Dec), pp. 1071-1094.
With a Little Help from my Enemy : Comparative Advertising as a Signal of Quality
P. GarellaSecondo
;
2009
Abstract
We extend the theory of advertising as a quality signal using a model where an entrant can choose to advertise by comparing its product to that of an established incumbent. Comparative advertising, comparing quality of one's own product to that of a rival's, empowers the latter to file for court intervention if it believes the comparison to be false or misleading. We show that comparative advertising can be a signal in instances where generic advertising is not viable.
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