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Well it assumes a zero-sum game from the perspective of the competitors. The combined advertising effort of all competitors could grow the entire pie that they
by fighterpilot 5y ago
Well it assumes a zero-sum game from the perspective of the competitors. The combined advertising effort of all competitors could grow the entire pie that they each share. Even though their percentage of the pie stays the same, the magnitude of the slice could be bigger, and that improvement in magnitude could outstrip the advertising cost, thus making it worthwhile.
- vikramkr 5y agoIn heavily saturated markets (notably cigarettes as the main well known case study), advertising can be more zero sum than not. No model is perfect, but the prisoners dilemma model for advertising is at least useful in a couple well known cases.
- fighterpilot 5y agoThe assumption being made here is that the market will remain saturated even if all advertising is pulled.