Hardcore for Nerds

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Dublin, Ireland. 27, history, politics & law graduate
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*from the title of a review of Arthur Koestler's Arrival and Departure by Michael Foot, Evening Standard, Nov. 26, 1943.
Feb 19

economics thought experiment

q. if corporate drink sponsorship is needed to support sports, etc. doesn’t it imply that it creates sales worth at least as much as the value of the sponsorship itself, meaning therefore if it were banned people would buy less alcohol (otherwise, why are drinks companies doing it, and why are anti-drinking campaigners calling for it to be banned?) and have more money to spend directly on sport?

a. the aim of sponsorship isn’t to create sales of alcohol in general as much as sales of a particular brand, so rather than creating demand in itself it is an arms race between brands, essentially a sunk cost in maintaining or extending market share. advertising serves to direct as well as stimulate demand, so removing it may only level the playing field between producers (or more likely, shift the game to another context). also, there’s no guarantee that if consumers did save money by not purchasing a product they would redirect that saving towards the previously-sponsored entertainment - just like on the internet, an indirectly paid-for pleasure erodes the willingness to pay for something seemingly out of one’s own pocket, rather than out of the marketing budgets of whatever manufacturing or service companies you do still buy stuff from. 

economics irish
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