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Misleading Advertising in Mixed Markets: Consumer-orientation and welfare outcomes

Ajay Sharma

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper, we analyse misleading advertising competition between private firms (profit oriented) and consumer-oriented firms (concerned about consumer welfare) in the context of mixed markets. The nature of advertising in this paper is assumed to be non-rival in nature and is beneficial to all the firms in the market. We find that, both private and consumer-oriented firms incur positive expenditure on misleading advertising. Further, the profit of consumer-oriented firms is higher than that of private firms. Moreover, irrespective of whether firms are concerned about consumer welfare or not, the level of misleading advertising is socially excessive.

Keywords: Misleading advertising; Non-rival advertising; Consumer-oriented firm; Mixed markets; Cournot competition (search for similar items in EconPapers)
JEL-codes: D21 L1 L2 L3 (search for similar items in EconPapers)
Date: 2019-09-24
New Economics Papers: this item is included in nep-bec, nep-com and nep-ind
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:96189

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