The objective of this paper is to provide a simple approach endogenizing the welfare reducing or welfare enhancing effect of informative advertising. Using this approach, it is possible to analyse the welfare consequences of a technology shock that reduces unit information costs, and to explain whether electronic junk mails or portal advertising will cause welfare gains or losses in a competitive environment.
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Paper provided by Universitaet Augsburg, Institute for Economics in its series Discussion Paper Series with number
275.
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