Formation/Cours

At the end of the course, the student should be able to:

– Integrate ideas from economics, psychology, and marketing to better under advertising.
– Describe and compare the persuasive, informative, and complementary views of advertising.
– Identify the determinants of a firm’s optimal level of advertising and use them to predict how the optimal level varies across time and products.
– Evaluate the effects of adverting on price, price elasticity, sales, and market share.
– Contrast advertising with other signals of product quality.
– Appraise the tax treatment of advertising expenditures.
– Summarize the economic rationale for regulating advertising.
– Explain the challenges faced by advertisers in the information age.
– Use course concepts to analyze observed advertising activities.

Why study the economics of advertising?
Review needed economic concepts.
Economic functions of advertising:
Advertising as persuasion,
Advertising as information,
Advertising as value enhancing.
Derivation and determinants of the profit maximizing advertising-to-sales ratio.
The effects of advertising on price, price elasticity, sales, and market share.
Understand the need for signals and compare and contrast signals product quality, including advertising.
Duration of advertising’s impact.
Advertising and the economics of attention.
Behvioral economics and advertising.
Regulation of advertising.