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Agricultural Market Structure, Generic Advertising, and Welfare

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

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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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
Contact details of provider: Web page: http://waeaonline.org/

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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. 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.
  3. S. Baranzoni & P. Bianchi & L. Lambertini, 2000. "Market Structure," Working Papers 368, Dipartimento Scienze Economiche, Universita' di Bologna.
  4. 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.
  5. 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.
  6. 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.
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