Advertising bans

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• dc.contributor.author Motta, Massimo
• dc.date.accessioned 2024-03-26T07:14:38Z
• dc.date.available 2024-03-26T07:14:38Z
• dc.date.issued 2013
• dc.description.abstract I show that an advertising ban is more likely to increase—rather than decrease—total consumption when advertising does not bring about a large expansion of market demand at given prices and when it increases product differentiation (thus allowing firms to command higher prices). In this case, the main impact of a ban on advertising is to reduce equilibrium prices and thus increase demand. I argue that this is more likely to happen in mature industries where consumer goods are ex-ante (i.e. without advertising) similar and advertising is of the ‘price-increasing’ type. The ban is the more likely to increase profits of the firms the weaker the ability of advertising to expand total demand and the less advertising serves to induce product differentiation.
• dc.description.sponsorship This is a substantially revised version of a working paper (Motta 1997) bearing the same title, and long forgotten in a drawer. I would like to thank H. Fickel and H. Savelkouls for stimulating discussions, A. Cabrales, A. Ciccone, R. Fauli-Oller, A. Holly, H. Hopenhayn, A. Irmen, J. Markusen, J. Miron, T. Nilssen, M. Polo, K. Stahl and T. Von Ungern-Sternberg, as well as seminar audiences at Lausanne, Mannheim, Louvain-la-Neuve, WZB Berlin, Lisbon (Univ. Nova) and Toulouse (European Economic Association Meeting) for their comments on previous drafts. Thanks also to the Editor, Victor Aguirregabiria, and two anonymous referees for their suggestions, as well as to Ilaria Masiero for research assistance. Financial aid from the Spanish Ministry of Science and Innovation (project ECO2010-15052) is gratefully acknowledged.
• dc.format.mimetype application/pdf
• dc.identifier.citation Motta M. Advertising bans. SERIEs. 2013 Mar;4(1):61-81. DOI: 10.1007/s13209-011-0084-1
• dc.identifier.doi http://dx.doi.org/10.1007/s13209-011-0084-1
• dc.identifier.issn 1869-4195
• dc.identifier.uri http://hdl.handle.net/10230/59568
• dc.language.iso eng
• dc.publisher Springer
• dc.relation.ispartof SERIEs. 2013 Mar;4(1):61-81
• dc.relation.projectID info:eu-repo/grantAgreement/ES/3PN/ECO2010-15052
• dc.rights This article is distributed under the terms of the Creative Commons Attribution 2.0 International License (https://creativecommons.org/licenses/by/2.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
• dc.rights.accessRights info:eu-repo/semantics/openAccess
• dc.rights.uri http://creativecommons.org/licenses/by/2.0
• dc.subject.keyword Advertising
• dc.subject.keyword Bans
• dc.subject.keyword Product differentiation
• dc.subject.keyword Regulation
• dc.subject.keyword Tobacco
• dc.subject.keyword Alcohol
• dc.title Advertising bans
• dc.type info:eu-repo/semantics/article
• dc.type.version info:eu-repo/semantics/publishedVersion