Issues in Advertising: The Economics of Persuasion

Issues in Advertising: The Economics of Persuasion

Issues in Advertising: The Economics of Persuasion

Issues in Advertising: The Economics of Persuasion

Excerpt

Among business practices, advertising is unique for the amount and variety of attention it receives. As a field of study, it concerns psychologists, marketing analysts, economists, and lawyers. As a regulatory issue, it arises in connection with antitrust, consumer protection, and, lately, energy conservation and the preservation of free speech. Inherent in advertising, there seem to be certain intriguing, even mysterious, qualities that explain what Robert Bork describes below as "the immense volume of literature" that it has engendered.

Why then should we add, as we do here, to this volume of literature? The answer lies not only in the importance and urgency of the issues involved but also in the hope that some narrowing of the debate might be achieved. That the outcome is often the reverse comes as no surprise in view of the juxtaposition of opposing points of view in which the organization of this work has resulted.

Issues In Regulation

The issues to which the writings that follow are directly or indirectly addressed are laid out by Professor Winter in his opening paper: (1) whether advertising "is a prime source of consumer deception," (2) whether it distorts consumer tastes, and (3) whether it promotes monopoly power. All three issues might be reduced to the more general question of how alternative regulatory policies toward advertising affect the efficiency with which the industrial system delivers goods to the consumer. Should there be more government regulation of advertising or less? Should the Federal Trade Commission be empowered and directed to pursue a more activist policy of the kind urged upon it by, say, Robert Pitofsky, or should it assume instead the more noninterventionist stance taken by Ralph Winter and Robert Bork? Papers and comments bearing on these questions are organized here along both disciplinary and substantive lines. Part 1 is largely legal in approach and Parts 2 through 4, mainly economic. Part 4 has implications for antitrust policy, while Parts 1 through 3 bear on consumer protection as well.

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