ADVERTISING TRADED GOODS
1998
Kinnucan, Henry W.
Nerlove and Waugh's theory of cooperative (generic) advertising is extended to include tax shifting, cost sharing, and trade. Comparative-static analysis indicates that trade reduces the incentive to promote in the domestic market, and this is true whether the industry inquestion is a net exporter or a net importer. The theory is applied to California egg advertising to demonstrate utility and to highlight the importance of including trade relationships in advertising benefit-cost studies.
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