TITLE:
Analysis of Advertising Marketing and Welfare in a Supply Chain
AUTHORS:
Iou-Min Lin, Chu Chuan Hsu, Jen-Yao Lee, Chung-Yang Lee
KEYWORDS:
Advertising Marketing, Cournot Competition, Supply Chain
JOURNAL NAME:
Theoretical Economics Letters,
Vol.15 No.2,
April
8,
2025
ABSTRACT: Quantity competition in advertising is a game with a second-mover advantage. Firms engaging in advertising efforts will increase market segmentation for their products but gain less profit. Through advertising, whether or not firms engage in advertising expenditures, all firms across the supply chain benefit from advertising activities, thereby enhancing social welfare. However, consumer surplus invariably decreases, harming consumer interests.