AbstractFirms have incentives to invest in wage reducing practices when they expect a high advertising equilibrium in the future product market competition. Incentives to invest in wage reducing practices like shifting the production to the third world or lobbying legislators to change labor market regulation by lowering the bargaining power of workers, can be explained by a link between the product market and labor market which operates through the effect of advertising on demand. Increased advertising implies under general conditions more production and therefore greater incentives to reduce production costs per unit.
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Bibliographic InfoPaper provided by Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy in its series CSEF Working Papers with number 77.
Date of creation: 01 Feb 2002
Date of revision:
advertising; wages; global economy;
Find related papers by JEL classification:
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- D60 - Microeconomics - - Welfare Economics - - - General
- J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-03-04 (All new papers)
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