predatory advertising theory and evidence in the pharmaceutical industry yutian cheny wei tanz job market paper november 15 2006 we want to thank sandro brusco hugo benitez silva yair tauman pradeep dubey zhen liu for helpful discussions comments ydepartment of economics suny stony brook ny 11794 usa email yutchen ic sunysb edu zdepartment wtan notes cc 1 abstract this investigate strategic interaction between competing firms after one firm crestor suffers bad news faces threat exit a game oretical analysis shows that its competitor having superior information about condition distorts level upward with intention inducing moreover such distortion only happens those physicians whose preference prior event fell within median range empirically test our prediction using physician data major finding is s main com petitor lipitor increased intensity most among whom already had share total prescriptions pattern not found other smaller competitors
