This paper develops a closed form model that relates advertising intensity and market
concentration. The shape of this relationship depends on the combative (or market
share) effect of advertising. If this effect does not exist, advertising intensity falls as an
industry fragments. If the combative effect is moderate, there is an inverted U relationship
between advertising intensity and market structure. When the combative effect is
very strong, advertising intensifies when there are more competitors. This paper studies
whether advertising aids competition or monopolization, and if there is excessive or
insufficient advertising.