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Media type:
E-Article
Title:
Generic Advertising and Product Differentiation Revisited
Contributor:
Crespi, John M.
imprint:
Walter de Gruyter GmbH, 2007
Published in:Journal of Agricultural & Food Industrial Organization
Language:
English
DOI:
10.2202/1542-0485.1153
ISSN:
1542-0485
Origination:
Footnote:
Description:
<jats:p>This paper revisits the analysis of generic commodity advertising under product differentiation by Crespi and Marette. Crespi and Marette had shown that a dominant firm producing high-quality goods and facing a competitive fringe of lower quality producers could be harmed by a generic advertising campaign while the fringe was left unaffected. Under this dominant-firm model, a question remained why these producers might support a program for which they were indifferent. In this paper we show that under a duopoly model a high-quality firm may be harmed while its lower-quality rival may be made better off by a generic program, thus helping to explain why some producers might favor a program while others do not. Further, this paper dismisses the claim made by some litigants that increased branded advertising is the result of a deleterious effect of generic advertising.</jats:p>