Advertising bans

I show that an advertising ban is more likely to increase -- ratherthan decrease -- total consumption when advertising does not bring abouta large expansion of market demand at given prices and when it increasesproduct differentiation (thus allowing firms to command higher prices). Inthis case, the main impact of a ban on advertising is to reduce equilibriumprices and thus increase demand. I argue that this is more likely tohappen in mature industries where consumer goods are ex--ante (i.e.without advertising) similar and advertising is of the `persuasive' type.The ban is the more likely to increase profits of the firms the weakerthe ability of advertising to expand total demand and the less advertisingserves to induce product differentiation.