Negative Advertising and Competitive Positioning

• 成果类型: Article
• 署名作者: Bostanci, Gorkem; Yildirim, Pinar; Jerath, Kinshuk
• 署名单位: University of British Columbia; University of Pennsylvania; University of Pennsylvania; Columbia University
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2022.4439
• 发表日期: 2023
• 页码: 2361-2382
• 关键词: negative advertising; product positioning; regulation; political campaigns

摘要

Negative advertising provides information about the weaknesses of a competitor's product. We study negative advertising with a focus on how its regulation impacts product positioning for profit-maximizing firms. We build a model of informative advertising competition, where product positioning is endogenous, and consumers have rational expectations. We show that despite the informational benefits of negative advertising, permitting it (as the Federal Trade Commission in the United States does) may lead to reduced product differentiation and lower consumer welfare, even in markets where firms do not use negative advertising in equilibrium. We then extend our model to political competition, where a candidate's objective is to obtain a larger share of votes than the competitor. We show that political competition supports higher positional differentiation, along with more negative advertising than product competition, in line with observed high use of negative advertising in political races and their rarer use in product competition.