The effect of marketing regulations on efficiency: LeChatelier versus coordination effects

Autor:	Victor J. Tremblay, Natsuko Iwasaki
Rok vydání:	2009
Předmět:	Microeconomics Economics and Econometrics Variable (computer science) Government Unintended consequences Data envelopment analysis Economics Production (economics) Social Welfare Business and International Management Marketing Tobacco industry Social Sciences (miscellaneous)
Zdroj:	Journal of Productivity Analysis. 32:41-54
ISSN:	1573-0441 0895-562X
DOI:	10.1007/s11123-009-0134-x
Popis:	Government regulations designed to promote social welfare can have unintended consequences on efficiency. According to the LeChatelier Principle, regulations that effectively limit substitution possibilities among inputs will reduce firm and industry-wide efficiency. In imperfectly competitive markets, however, government constraints on a strategic variable can facilitate coordination. An advertising restriction, for example, would improve efficiency if it enables firms to produce the same level of sales with less advertising spending. We use data envelopment analysis to estimate the effect of marketing regulations on efficiency in the U.S. cigarette industry. Unlike previous studies, we do not assume that marketing and production technologies are separable. Our results demonstrate that coordination effects dominate LeChatelier effects. Cigarette producers have benefited from advertising restrictions, a result consistent with the capture theory of regulation.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::65b630005fde3c071b6164ddd5fecf35 https://doi.org/10.1007/s11123-009-0134-x Zobrazit plný text záznamu Plný text ve formátu PDF