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Agricultural Market Structure, Generic Advertising, and Welfare

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Author Info

  • Cardon, James H.
  • Pope, Rulon D.

Abstract

This analysis begins with a definition and discussion of productive advertising. Then, following Dixit and Norman, persuasive advertising is used to study the welfare effects of generic advertising by marketing orders. The study first examines horizontal competition when the competing advertiser is a monopoly, and results show that the socially optimal level of advertising for a competitive marketing order is positive only if advertising raises monopoly output. Next, advertising choices of a marketing order which sells its output to a monopolistic distributor are considered. If the distributor is a monopolist, then marketing order advertising raises welfare. This finding is in marked contrast to the results for the horizontal case studied by Dixit and Norman.

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File URL: http://purl.umn.edu/31098
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Bibliographic Info

Article provided by Western Agricultural Economics Association in its journal Journal of Agricultural and Resource Economics.

Volume (Year): 28 (2003)
Issue (Month): 02 (August)
Pages:

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Handle: RePEc:ags:jlaare:31098

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Web page: http://waeaonline.org/
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Related research

Keywords: advertising; market structure; welfare; Marketing;

References

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  1. Donald J. Liu, 2000. "Distributional Impacts of Generic Advertising: Comments," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(3), pages 679-681.
  2. Nicholas E. Piggott, 2000. "The Incidence of the Costs and Benefits of Generic Advertising," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(3), pages 665-671.
  3. Henry W. Kinnucan & Yuliang Miao, 2000. "Distributional Impacts of Generic Advertising on Related Commodity Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(3), pages 672-678.
  4. S. Baranzoni & P. Bianchi & L. Lambertini, 2000. "Market Structure," Working Papers 368, Dipartimento Scienze Economiche, Universita' di Bologna.
  5. Julian M. Alston & John W. Freebairn & Jennifer S. James, 2001. "Beggar-Thy-Neighbor Advertising: Theory and Application to Generic Commodity Promotion Programs," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(4), pages 888-902.
  6. Chanjin Chung & Harry M. Kaiser, 2000. "Distribution of Generic Advertising Benefits Across Participating Firms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(3), pages 659-664.
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Cited by:
  1. Tribl, Christoph & Salhofer, Klaus, 2005. "Promoting Organic Food: Information Policy Versus Production Subsidy," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24653, European Association of Agricultural Economists.
  2. Goddard, Ellen W. & Shank, Benjamin & Panter, Chris & Nilsson, Tomas K.H. & Cash, Sean B., 2007. "Canadian Chicken Industry: Consumer Preferences, Industry Structure and Producer Benefits from Investment in Research and Advertising," Project Report Series 52088, University of Alberta, Department of Resource Economics and Environmental Sociology.
  3. Tribl, Christoph & Salhofer, Klaus, 2004. "Promoting Organic Food: Information Policy Versus Production Subsidy," 2004 Annual meeting, August 1-4, Denver, CO 20003, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  4. Carpio, Carlos E. & Isengildina-Massa, Olga, 2013. "Does Government Sponsored Advertising Increase Social Welfare? A Theoretical and Empirical Investigation," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149835, Agricultural and Applied Economics Association.

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