A Simple Theory of Advertising as a Good or Bad
AbstractOur analysis treats advertisements and the goods advertised as complements in stable metautility functions, and generates new results for advertising by building on and extending the general analysis of complements. By assimilating the theory of advertising into the theory of complements, we avoid the special approaches to advertising found in many studies that place obstacles in the way of understanding the effects of advertising. We also use this approach to evaluate advertising from a welfare perspective. Whether there is excessive or too little advertising depends on several variables: the effects on consumer utility, the degree of competition in the market for advertised goods, the induced changes in prices and outputs of advertised goods, and whether advertising is sold to consumers. Copyright 1993, the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
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Bibliographic InfoArticle provided by MIT Press in its journal Quarterly Journal of Economics.
Volume (Year): 108 (1993)
Issue (Month): 4 (November)
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Becker and Murphy on advertising
by John Quiggin in Crooked Timber on 2006-05-12 08:47:05
- Becker and Murphy on advertising (crossposted at CT)
by John Quiggin in John Quiggin on 2006-05-11 12:00:00
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