Positive Spillovers and Free Riding in Advertising of Prescription Pharmaceuticals: The Case of Antidepressants
利用电视市场边界的广告投放不连续性，发现抗抑郁药广告对竞品需求有显著正溢出效应，并基于需求估计模拟了企业广告决策，表明行业联合广告可大幅提升总广告量。
Exploiting the discontinuity in advertising along the borders of television markets, I estimate that television advertising of prescription antidepressants exhibits significant positive spillovers on rivals' demand. I apply this identification in a demand model, where estimated parameters indicate significant and persistent spillovers driven by market expansion. Using the demand estimates to calibrate a stylized supply model, I explore the consequences of the positive spillovers on firm advertising choice. Compared with a competitive benchmark in which firms optimally free ride, simulations suggest that a category-wide advertising cooperative would produce a significant increase in total advertising.