Persuasive and Informative Advertising: A Classroom Experiment

This paper outlines a pair of classroom activities designed to provide an intuitive foundation to the theoretical introduction of advertising in monopoly markets. The roles of both informative and persuasive advertising are covered. Each student acts as a monopolist and chooses the number of (costly) advertisements and price. The experiments are intended for intermediate microeconomics or industrial organization courses, though may be utilized in any course that covers advertising models.