Title

Persuasive Advertising and Consumer Welfare

Document Type

Article

Publication Date

Fall 1992

Department

International Business and 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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