Journal of Economics and Development Studies

Economics of Information and Advertising: A Comparative Analysis in View of Conventional and Islamic Economics
Basharat Hossain

Abstract
Information has enormous influences to maximize the satisfaction of economic agents whereas advertising works as media to convey information to the market. Informative advertising makes consumers better off while persuasive or uninformative advertising worsens off them. This paper makes a comparison between Islamic and conventional theories of information and advertisements through the “Constructionist” approach. This paper reveals that, Islamic theories are more effective than the conventional theories, because Islamic economics scrutinizes the market in terms of both positive and normative sight. On the contrary, conventional theories evaluate the market in terms of positive view only and promote contemporary advertisement which uses some unfair means including women, nudity, sexual appeals, and misinformation which further creates serious social, cultural and ethical problems in market. This problem prolongs due to absent of ethics and Islamic principles in conventional business. This article illustrates that, since law is not worth enough to correct the market, so an integration of Islamic principles and ethics to conventional theories is needed to eliminate the information asymmetries in advertising. Furthermore, conventional theories have no cure to dishonesty like information manipulation whilst Islamic economics derived from the Quran and Hadith offers rewards and punishments for honesty and dishonesty in business transactions.

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