Economics, Econometrics and Finance
8 years ago

Competing advertising hurts producers, leads to excessive spending on generic promotion.

American Journal of Agricultural Economics
Beggar‐Thy‐Neighbor Advertising: Theory and Application to Generic Commodity Promotion Programs
Julian M. Alston, John Freebairn, Jennifer S. James

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Generic advertising by producer groups can harm producers of similar products. Excessive advertising is worsened by check-off funding. When producer groups cooperate on advertising, profits increase. In a 1998 study on U.S. beef and pork, independent advertising spending was over three times higher than the cooperative optimal amount.