Misleading advertising in duopoly
研究了双寡头市场中水平产品差异和广告外部性下的策略性误导广告，分析了禁止误导广告、消费者教育、生产税和误导广告税等监管措施对市场竞争、企业行为和社会福利的影响。
Abstract This paper builds a model of strategic misleading advertising in duopolistic markets with horizontal product differentiation and advertising externality between firms. We investigate the effects of regulating misinformation on market competition, behaviour of firms, and social welfare. We show that the degree of advertising externality and the magnitude of advertising costs are crucial for determining the welfare effects of several regulations, including prohibiting misleading advertising, educating consumers, taxing production, and taxing misleading advertising. We extend the model by introducing heterogeneous consumers, heterogeneous production costs between firms, and the degree of advertising informativeness. Our results have important policy implications for the debate regarding regulation of advertising, especially direct‐to‐consumer advertising for prescription and over‐the‐counter drugs.