Search results for " free-riding"
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Generic Advertising, Brand Advertising and Price Competition: An Analysis of Free-Riding Effects and Coordination Mechanisms
2010
The main purpose of generic advertising is to enlarge the total market demand rather than capturing further slices from competitors. Several studies point out emergence of free-riding behavior under independent contribution and suggest use of coordination mechanism. However, existing literature does not shed light on the conditions under which generic advertising can be detrimental (beneficial) to stronger firms weakening (strengthening) their competitive advantage. Also, under a setting including both price and brand advertising competition, coordination in generic advertising has not been unraveled. In order to deal with such issues, we consider a one-stage duopoly game in which two firms…