With estimates of these regression equations, one can test the hypothesis that advertising causes a symmetric versus an asymmetric price-equilibrium. If advertising creates subjective horizontal differentiation and produces a symmetric equilibrium (Regime 1), then advertising will have no effect on the variance of prices since this type of persuasive advertising causes all prices to rise proportionally. If advertising creates subjective vertical differentiation and produces an asymmetric equilibrium (Regime 2), then advertising will increase the variance in prices as the price of the brand of perceived higher quality will rise relative to that of other brands.12 With appropriate data, similar models could be developed to test the extent to which persuasive advertising induces asymmetries in output and advertising expenditures.