The Impact of Advertising Regulation on Industry - The Cigarette Advertising Ban of 1971
This paper develops and estimates a dynamic oligopoly model of advertising in the cigarette industry. With this estimated model, I evaluate the impact of the 1971 TV/Radio advertising ban on the cigarette industry. A puzzling fact about this ban is that, while industry advertising spending decreased sharply immediately following its passage, spending then recovered and actually exceeded its pre-ban level within five years. While simple static models cannot account for such a turn of events, the rich dynamic model developed in this paper can. This paper exploits previously confidential micro data, now made public through tobacco litigation. In addition, the paper uses a new concept of Oblivious Equilibrium to handle intractable state space and accelerate equilibrium computation.
|Date of creation:||2011|
|Date of revision:|
|Contact details of provider:|| Postal: Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA|
Web page: http://www.EconomicDynamics.org/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:red:sed011:868. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christian Zimmermann)
If references are entirely missing, you can add them using this form.