Artificial demand constitutes demand

Demand

- Economics :*Demand , the desire to own something and the ability to pay for it*Demand curve, a graphic representation of a demand schedule*Demand deposit, the money in checking accounts...

 for something that, in the absence of exposure to the vehicle of creating demand, would not exist. It has controversial applications in microeconomics

Microeconomics

Microeconomics is a branch of economics that studies the behavior of how the individual modern household and firms make decisions to allocate limited resources. Typically, it applies to markets where goods or services are being bought and sold...

 (pump and dump strategy

Pump and dump

"Pump and dump" is a form of microcap stock fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements, in order to sell the cheaply purchased stock at a higher price....

) and advertising

Advertising

Advertising is a form of communication used to persuade an audience to take some action with respect to products, ideas, or services. Most commonly, the desired result is to drive consumer behavior with respect to a commercial offering, although political and ideological advertising is also common...

. Synonyms for "artificial demand" include "fake demand" and "false need".

A demand is usually seen as artificial when it increases consumer utility

Allocative efficiency

Allocative efficiency is a theoretical measure of the benefit or utility derived from a proposed or actual selection in the allocation or allotment of resources....

 very inefficiently; for example, a physician proscribing unnecessary surgeries would be creating artificial demand. Government spending with the primary purpose of providing jobs (rather than deliverying any other end product) has been labelled "artificial demand".

Vehicles of creating artificial demand can include mass media

Mass media

Mass media refers collectively to all media technologies which are intended to reach a large audience via mass communication. Broadcast media transmit their information electronically and comprise of television, film and radio, movies, CDs, DVDs and some other gadgets like cameras or video consoles...

 advertising, which can create demand for goods, services, political policies

Policy

A policy is typically described as a principle or rule to guide decisions and achieve rational outcome. The term is not normally used to denote what is actually done, this is normally referred to as either procedure or protocol...

 or platforms, and other entities.

Another example of artificial demand can be seen in penny stock

Penny stock

In the United States, penny stocks are common shares of small public companies that trade at less than $1.00. In some countries, similar shares of stock are known as cent stocks.-Concerns for investors:...

 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 guerilla marketing strategy.