Advertising Has Got You On The Run. Well-Being, Consumption and Leisure in a GE model

Fabio Fiorillo (f.fiorillo@univpm.it), Marco Lilla (m.lilla@univpm.it) and Stefano Staffolani

No 389, Working Papers from Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali

Abstract: This paper presents a general equilibrium model where rms producing the consumption good in an oligopolistic market purchase advertising in order to increase their market shares. The model aims to evaluate the general equilibrium consequences of such a behaviour. It analyses the e ects of a taxation of advertising on demand for the nal good, on working time and on individual well-being. We conclude that, unless the direct e ects of advertising on utility are strong, a positive tax rate on advertising raises leisure, reduces consumption and increases well-being.

Keywords: Advertising; Welfare (search for similar items in EconPapers)
JEL-codes: D11 D43 D60 M37 (search for similar items in EconPapers)
Pages: 16
Date: 2013-02
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Persistent link: https://EconPapers.repec.org/RePEc:anc:wpaper:389

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