Role of advertising spending in experience good markets

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1. If a firm faces asymmetric information and it has to invest in R&D to increase the probability of high quality, does this information lead to more or less investment? Discuss the effects that play a role.

2. What is the role of advertising spending in experience good markets? Are spending caps welfare increasing?

Reference no: EM131282320

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Role of advertising spending in experience good markets : If a firm faces asymmetric information and it has to invest in R&D to increase the probability of high quality, does this information lead to more or less investment? Discuss the effects that play a role.

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