Advertising, Welfare Economics and Ethics
AbstractIt is a fact of life that economic resources are used to alter other's preferences over commodities. Yet this is seldom taken into account in basic economic theory, explanatory or normative. It is shown here how a certain type of advertising is readily allowed for in the Edgeworth exchange box, in the small country foreign trade model, etc.. It is found, in welfare terms, that exchange/trade with advertising can involve some agents gaining at the expense of others; there need not be mutual gain. To deal with sales promotion, welfare economics needs to step outside the familiar Paretian framework to face difficult (and perhaps contentious) ethical issues, some of which are raised here.
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Bibliographic InfoPaper provided by Max Planck Institute of Economics, Evolutionary Economics Group in its series Papers on Economics and Evolution with number 2011-07.
Date of creation: Jun 2011
Date of revision:
Find related papers by JEL classification:
- B - Schools of Economic Thought and Methodology
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-07-02 (All new papers)
- NEP-COM-2011-07-02 (Industrial Competition)
- NEP-HPE-2011-07-02 (History & Philosophy of Economics)
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