Wohlfahrtsgewinne durch Preisregulierung?
In: List Forum Band 34
The article shows that a price regulation can have consequences on a monopolist's advertisement expen-diture. Due to the fact that a price regulation limits the free choice of both instruments price and adver-tisement, the enterprise is forced to use the two parameters in a suboptimal ratio. A simple model shows that a price decrease by price regulation diminishes ceteris paribus the advertising volume. Hence, it can make sense from a welfare-point of view to regulate prices less intensively in order to obtain the market-extending effect of advertisement. (Original text only available in german language)
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