Why tobacco companies might like the advertising ban

Several years ago, the U.S. government came down hard on tobacco companies and limited advertising on TV and in magazines. The move was meant both to discourage smoking and to punish the tobacco companies. Is that what really happens?

It’s worth analyzing since advertising bans are often discussed. There used to be a self-imposed TV ban on hard alcohol, and just now the U.K. is considering a ban on junk food ads targeted at children.

What’s the game theory of the situation? Could a ban actually help companies?

It turns out an advertising ban can be inadvertently beneficial to companies. There’s a nice video on Youtube that explains why using the Prisoner’s Dilemma as the model:

Youtube video link – Games People Play

And sorry, the video is an ad for a teaching website and they have disabled embedding on other websites, so you’ll have to view it on Youtube.