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Professor Ilwoo Hwang
Associate Professor
Department of Economics
Seoul National University

We consider an oligopoly model in which each firm chooses not only its price but also its advertising strategy regarding how much product information to provide. To highlight firms’ strategic incentives, we impose no structural restriction on feasible advertising content, so that each firm can disclose or conceal any information. We provide a general characterization of the equilibrium advertising content and show that intense competition induces firms to provide precise product information. We also demonstrate that strategic advertising has ambiguous implications for market prices and consumer surplus.