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.
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. Government spending with the primary purpose of providing jobs (rather than delivering any other end product) has been labelled "artificial demand". 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", with military Keynesianism or a powerful military industrial complex amounts to the "creation of state-guaranteed markets for high technology waste (armaments)."
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.
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