Advertising: the Persuasion Game

The ”Persuasion Game” was originally configured to analyze a firm’s choice of how much vertical product information it would wish to reveal. Perhaps unsurprisingly, a firm wants to reveal its true quality. We extend the persuasion game to bring it squarely into the economics of advertising. Extending Anderson and Renault (2006), we analyze advertising content and the information disclosed to consumers. We show that quality information takes precedence over price information and horizontal product information.