Informative advertisement of partial compatible products

Roig Roig, Guillem

Ítem

Acceso Abierto

Informative advertisement of partial compatible products

Mostrar el registro sencillo de la publicación

dc.creator	Roig Roig, Guillem
dc.date.accessioned	2020-09-11T21:05:39Z
dc.date.available	2020-09-11T21:05:39Z
dc.date.created	2014-03-26	spa
dc.description.abstract	Product design and advertisement strategy have been theoretically studied as separate firms decisions. In the present paper, we look at the link between advertisement and product design and we analyze how firms’ advertising decisions influence the market effect of product design. We consider a model of informative advertisement where two firms produce a bundle of complementary products which are partially compatible. A product design with more compatible components is associated with a larger intensity of advertisement. Higher compatibility reduces competition between firms, which incentivizes them to give factual information about their bundle. Like Matutes and Regibeau (1988), industry profit and total welfare is maximized with full product compatibility. However, contrary to them, we obtain that consumer surplus is not monotone with the level of product compatibility and its maximum is attained with partial compatibility. Moreover, because consumer surplus not only depends on the equilibrium prices but also on the intensity of advertisement, we find that for intermediate equilibrium levels of advertising, consumers prefer fully compatible components rather than full incompatibility. As a result, a more compatible product design benefits all the agents in the economy.	eng
dc.format.mimetype	application/pdf
dc.identifier.uri	https://repository.urosario.edu.co/handle/10336/29845
dc.language.iso	eng
dc.publisher	Toulouse School of Economics	spa
dc.relation.citationIssue	No. 483
dc.relation.citationTitle	TSE Working Papers
dc.relation.ispartof	TSE Working Papers, No. 483 (March 2014); 24 pp.	spa
dc.relation.uri	http://publications.ut-capitole.fr/id/eprint/15876	spa
dc.rights.accesRights	info:eu-repo/semantics/openAccess
dc.rights.acceso	Abierto (Texto Completo)	spa
dc.source	TSE Working Papers	spa
dc.source.instname	instname:Universidad del Rosario
dc.source.reponame	reponame:Repositorio Institucional EdocUR
dc.subject.keyword	Informative advertisement	spa
dc.subject.keyword	Product design	spa
dc.subject.keyword	Partial compatibility	spa
dc.subject.keyword	Welfare	spa
dc.title	Informative advertisement of partial compatible products	spa
dc.title.TranslatedTitle	Publicidad informativa de productos parcialmente compatibles	spa
dc.type	preprint	eng
dc.type.hasVersion	info:eu-repo/semantics/draft
dc.type.spa	Pre-print	spa