Title

Persuasive Advertising and Consumer Welfare

Document Type

Article

Publication Date

Fall 1992

Department

International Business & Management

Language

English

Publication Title

Pennsylvania Economic Review

Abstract

Economists studying the welfare effects of advertising typically face a dilemma: advertising appears to change tastes, but welfare effects are not calculable when tastes change. By using a model where taste do not change, Kotowitz and Mathewson (1979) derive a method for calculating the welfare effect of informative advertising. This paper presents a model of persuasive advertising in which tastes do not change; the welfare effect of persuasive advertising is therefore calculable using this model.

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