Advertising and Market Power

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Harvard University Press, 1974 - Business & Economics - 257 pages

The current debate over the economics of advertising has long focused on two questions. The first concerns the impact of advertising on the relative positions of large and small firms in an industry and thereby on the state of competition. The second examines the role of advertising on consumer purchasing decisions over broad consumption categories. Comanor and Wilson use the modern tools of economic theory and statistics to build and test their hypotheses, and contribute important analytical and empirical evidence on the key issues.

The authors find that consumer decisions are affected substantially by the volume of advertising. Indeed, advertising is a weightier factor than relative prices. Their conclusions surely contribute to the nervousness long felt by economists over the use of consumer preferences to evaluate the welfare implications of resource allocation.

 

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Contents

The Market for Advertising Messages
8
FIGURES
17
Advertising and Consumer Choice
22
Advertising as a Barrier to Entry
41
TABLES
57
Advertising and Market Demand
64
equations selected 8990
89
Appendixes 5AD
93
Sources of data
133
The Determinants of Advertising Expenditures
138
and IV
157
Appendix 7A
164
Appendix 8A
194
6a Differential advertising intensity crosstabulated with
209
Advertising and the Advantages of Size
217
Appendix 10A
235

Coefficients for FlowAdjustment model with a firstorder
101
Advertising and Profit Rates
110
industries
117

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