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Review of Industrial Organization

, Volume 5, Issue 3, pp 45–70 | Cite as

Does purely predatory advertising exist?

  • Barry J. Seldon
  • Khosrow Doroodian
Article

Abstract

"Purely predatory advertising" has been defined as advertising which redistributes market share but does not affect market demand. Purely predatory advertising is commonly assumed in the industrial economics literature; but its existence is an empirical question. Since cigarette advertising is widely considered to epitomize purely predatory advertising, we analyze firm level panel data for the United States cigarette industry to study the question of existence using an econometric procedure which corrects for autocorrelation and contemporaneous correlation. Statistical tests support the hypothesis that cigarette advertising is purely predatory.

Keywords

Market Share Panel Data Industrial Organization Market Demand Economics Literature 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Industrial Organization Society 1990

Authors and Affiliations

  • Barry J. Seldon
    • 1
  • Khosrow Doroodian
    • 2
  1. 1.School of Social SciencesUniversity of Texas at DallasUSA
  2. 2.Department of EconomicsOhio UniversityUSA

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