Artificial demand

Artificial demand constitutes demand for something that, in the absence of exposure to the vehicle of creating demand, would not exist. It has controversial applications in microeconomics (pump and dump strategy) and advertising.[1][2]

A demand is usually seen as artificial when it increases consumer utility very inefficiently; for example, a physician prescribing unnecessary surgeries would create artificial demand.[3] Government spending with the primary purpose of providing jobs (rather than delivering any other end product) has been labelled "artificial demand".[4] Similarly Noam Chomsky has suggested that unchecked militarism is a type of government-created artificial demand, a "system of state planning ... oriented toward military production, in effect, the production of high technology waste",[5] with military Keynesianism or a powerful military industrial complex amounts to the "creation of state-guaranteed markets for high technology waste (armaments)."[6][7][8][9][10]

Vehicles of creating artificial demand can include mass media advertising, which can create demand for goods, services, political policies or platforms, and other entities.

Another example of artificial demand can be seen in penny stock spam. After purchasing a large number of shares of an extremely low-value stock, the spammer attempts to create artificial demand by implementing a spam-based guerrilla marketing strategy.

See also

References
  1. Strange, Adario (April 15, 2015). "Why Apple Loves Gold". Mashable. Retrieved September 11, 2015.
  2. Trefis Team (September 2, 2015). "Looking At The Significance Of Sirius XM's Latest $2 billion Share Repurchase Program". Forbes. Retrieved September 11, 2015.
  3. MacGregor, C. C. (February 2000). "Economic Theory and Physician Behavior in Bariatric Surgery". Obesity Surgery. Springer. 10 (1): 4–6. doi:10.1381/09608920060674012. PMID 10715635. S2CID 5291713.
  4. "Real Demand is Not Artificial". www.american-consensus.org. American Consensus. 2008. Retrieved 2016-07-17.
  5. "ZQuote". www.zcommunications.org. 2013-03-09. Archived from the original on March 9, 2013. Retrieved 2016-07-17.
  6. "Peace Magazine v03n4p33: Chomsky: Our System Depends on Arms Race". peacemagazine.org. Retrieved 2016-07-17.
  7. Chomsky, Noam (1990-01-01). On Power and Ideology. Black Rose Books Ltd. p. 106. ISBN 9780921689041. Retrieved 2016-07-17.
  8. Chomsky, Noam (2004-01-01). Language and Politics. AK Press. pp. 614. ISBN 9781902593821. Retrieved 2016-07-17. chomsky%20%22high%20technology%20waste%22.
  9. Chomsky, Noam (2002-01-01). Pirates and Emperors, Old and New: International Terrorism in the Real World. South End Press. pp. xi. ISBN 9780896086852. Retrieved 2016-07-17.
  10. Chomsky, Noam (1988-01-01). The Culture of Terrorism. Black Rose Books Ltd. p. 26. ISBN 9780921689287. Retrieved 2016-07-17.
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