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Advertising Has Got You On The Run. Well-Being, Consumption and Leisure in a GE model

Author

Listed:
  • Fabio FIORILLO

    (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali)

  • Marco LILLA

    (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali)

  • Stefano STAFFOLANI

    (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali)

Abstract

This paper presents a general equilibrium model where rms producing the consumption good in an oligopolistic market purchase advertising in order to increase their market shares. The model aims to evaluate the general equilibrium consequences of such a behaviour. It analyses the e ects of a taxation of advertising on demand for the nal good, on working time and on individual well-being. We conclude that, unless the direct e ects of advertising on utility are strong, a positive tax rate on advertising raises leisure, reduces consumption and increases well-being.

Suggested Citation

  • Fabio FIORILLO & Marco LILLA & Stefano STAFFOLANI, 2013. "Advertising Has Got You On The Run. Well-Being, Consumption and Leisure in a GE model," Working Papers 389, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    • Handle: RePEc:anc:wpaper:389
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    References listed on IDEAS

    as
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    4. Pintea, Mihaela I., 2010. "Leisure externalities: Implications for growth and welfare," Journal of Macroeconomics, Elsevier, vol. 32(4), pages 1025-1040, December.
    5. Nelson, Philip, 1974. "Advertising as Information," Journal of Political Economy, University of Chicago Press, vol. 82(4), pages 729-754, July/Aug..
    6. Lonnie Golden, 2009. "A Brief History of Long Work Time and the Contemporary Sources of Overwork," Journal of Business Ethics, Springer, vol. 84(2), pages 217-227, January.
    7. Robert B. Ekelund & Franklin G. Mixon & Rand W. Ressler, 1995. "Advertising and information: an empirical study of search, experience and credence goods," Journal of Economic Studies, Emerald Group Publishing, vol. 22(2), pages 33-43, May.
    8. Luigi Marattin, 2008. "The Impact Of Advertising On Aggregate Consumption: The Case Of Italy," Journal of Applied Economic Sciences, Spiru Haret University, Faculty of Financial Management and Accounting Craiova, vol. 3(3(5)_Fall), pages 223-231.
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    More about this item

    Keywords

    Advertising; Welfare;

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D60 - Microeconomics - - Welfare Economics - - - General
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising

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