Misleading advertising in mixed markets: non-profit orientation and welfare outcomes. Issue 2 (3rd May 2020)

• Record Type: Journal Article
• Authors: Sharma, Ajay
• Is Part Of: International journal of the economics of business. Volume 27:Issue 2(2020)
• Page Start: 291
• Page End: 302
• Publication Date: 2020-05-03
• Subjects: Misleading advertising -- non-rival advertising -- consumer-oriented firm -- mixed markets -- Cournot competition; D21 -- L10 -- L29 -- L30; Economics -- Periodicals; Business -- Periodicals; 338.5024658
• DOI: 10.1080/13571516.2019.1674491
• Languages: English
• ISSNs: 1357-1516

Abstract

Abstract: In this article, 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 article 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.