The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd


  • Richard Schmalensee
Reference work entry


Empirical studies suggest that advertising is not an important determinant of consumer behaviour and that advertising follows rather than leads cultural trends. On the core issue of whether advertising is anti- or pro-competitive, the evidence suggests that advertising is associated with lower prices.


Advertising Concentration Market structure Entry 

JEL Classifications

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Bibliographic Addendum

  1. Ackerberg, D.A. 2001. Empirically distinguishing informative and prestige effects of advertising. RAND Journal of Economics 32: 316–333.CrossRefGoogle Scholar
  2. Benham, L. 1972. The effect of advertising and the price of eyeglasses. Journal of Law and Economics 15: 337–352.Google Scholar
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  7. Milyo, J., and J. Waldfogel. 1999. The effect of price advertising on prices: Evidence in the wake of 44 Liquormart. American Economic Review 89: 1081–1096.CrossRefGoogle Scholar

Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Richard Schmalensee
    • 1
  1. 1.