SITUATION: BANNING CIGARETTE ADVERTISING ON TELEVISION
Winston tastes good like a cigarette should!*
If you grew up in the 1960s, you would know that popular jingle from tele- vision commercials for Winston cigarettes. In fact, it was so common that many people (like me!) remember it even though it hasn’t been broadcast for more than 30 years. Since a federally mandated ban went into effect in 1971, no advertisements for tobacco products have either been seen or heard on tel- evision or radio in the United States.
Typically, a government-imposed restriction is something that a company disdains. Taking away options usually means limiting avenues for achieving higher profit. In a game-theoretic setting, however, losing options is not al- ways bad. Is it possible that the TV and radio ban might have increased the profits of the tobacco manufacturers?
Consider Philip Morris and R. J. Reynolds, which were (and still are) the largest cigarette manufacturers. Most people know their Marlboro and Winston brands of cigarettes. In considering how much advertising is needed, it is critical to understand how advertising affects the number of packs of