MARKET POWER AND SOCIAL WELFARE: THE IMPACT OF ADVERTISING

Authors: А. Ignatyuk, Doctor of Sciences (Economics), Professor ORCID iD 0000-0002-9103-6943, М. Sobolieva, PhD in Economics Taras Shevchenko National University of Kyiv, Kyiv, Ukraine, М. Saykevich, PhD in Economics, Assосiate Professor Zhytomyr National Agroecological University, Zhytomyr, Ukraine

Abstarct: The article explores the influence of monopoly power, arising from the use of advertising in the pharmaceutical industry, on public welfare: from the standpoint of market equilibrium and the well-being of society (Becker-Murphy model); in terms of consumer equilibrium (Tremblay-Polaski model); from manufacturer’s equilibrium position (model NEIO). Based on these models, an attempt was made to answer the question of the negative or positive impact of non-price competition (for example, advertising) on public welfare.

Key words: advertising, generic products, monopoly power, product hopping, social welfare, pharmaceutical industry.

Received: 08/01/2020

1st Revision: 06/02/2020

Accepted: 20/02/2020

DOI:   https://doi.org/10.17721/1728-2667.2020/208-1/1

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