Abstract: The manufacturer with demand information superiority will send demand information to complementary manufacturer by using advertising as signal of demand in order to stimulate its adverting investment and obtain more profits. To settle this problem, the signaling game theory model on advertising decision-making between complementary goods manufacturers considering spillover effect is established in this paper. Based on the model, the condition of separating and pooling equilibrium are solved, and the optimal advertising strategies and profits of complementary manufacturers under these two equilibriums are analyzed. Additionally, the advertising strategy choices of complementary manufacturers are discussed. The results show that under the separating equilibrium, the manufacturer with information superiority can't stimulate its complement manufacturer to increase advertising investment by using advertising as signal. Under pooling equilibrium, only when the market demand is low, the manufacturer with information superiority can stimulate its complement manufacturer to increase advertising investment by using advertising as signal and obtain more profits from advertising spillover effect. Finally, a numerical example is given to demonstrate the effectiveness of the relevant conclusions.

Key words: complementary goods, spillover effect, advertising decision-making, incomplete information, signaling game