Burger King stops advertising on Tv and loses even more market share to McDonalds. McDonalds then spends less on advertising because it realizes it doesn't need to because Burger Kind gave up. You're left with a "monopoly", McDonalds whose shareholders/top management make even more money, rather than it being redistributed to employees of Burger King.

That's why such change needs to be enforced simultaneously and externally.

As an example, I recall reading that tobacco companies were actually very happy about regulations limiting the marketing of tobacco products - by themselves, those regulations didn't change anything about their market share (the market was already saturated), but everyone got to stop spending so much on advertising.

Oh I'm sure Marlboro, who spent decades building a brand, wouldn't really care about newcomers not being able to advertise. That makes sense.

I don't think Marlboro cared about newcomers, a big company can usually buy out the small one if it gets dangerous. Consumers usually don't even notice.

Unrestricted advertising is basically Red Queen's race; capping it levels the playing field, so it's better for newcomers as well.

They especially don't care when they have no chance of growing to a level where they can get dangerous (because they can't advertise).

How much evidence* is there that "stopping advertising [on TV]" necessarily causes a loss of market share?

* specifically evidence not funded by the ad industry

The premise was not having ads at all, not one company giving up on ads.

Feels like a chicken and egg problem.

McDonalds would only have that dominance thanks to years of advertising. If the mass advertising game never existed, those companies would have to have grown through their own merits instead of advertising dollars, and BK might have a chance (opinions of their food nonwithstanding). I think that's what the person meant by "but they can't [agree not to advertise]", because now we're at a point where removing advertising from the equation would favor those who have already advertised the most.

> I think that's what the person meant by "but they can't [agree not to advertise]", because now we're at a point where removing advertising from the equation would favor those who have already advertised the most.

That's not what I meant. What I meant is that neither BK nor McD can risk cutting advertising efforts, because if either one does, the other automatically starts winning market share. They can't agree to it together, because the first party to defect from the agreement will win (not to mention a third party could swoop in and (excuse the pun) eat their lunch).

This is a prisoner's dilemma situation, and as we all know, the optimal solution for prisoner's dilemma is to have a mob boss proclaim that he'll kill any prisoner that rats others out to authorities. Similarly, either there's a way to punish defectors, or McD and BK will forever be stuck in the loop of ever growing advertising expenses.

Removing advertising would definitely benefit both BK and McD, as both could be able to stop spending money on advertising just to protect their market share.