The fact that people buy heavily advertised products, at prices that support ads, over presumably cheaper alternatives implies that advertising provides consumer utility.
Only if there is no place in your model for people being tricked.
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Nike takes a shoe that normally sells for $50, pays Michael Jordan to endorse it, stitches his name on the side, and now sells the shoe for $100. If I buy the shoe, was I tricked or has Nike created (at least) $50 of additional utility?
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Probably a mix, since your motives probably are. To the extent you're happy because you're a Jordan fan, it's utility of a sort. If it's because you think the shoe's better, you've been tricked.
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You assume that there isn't some degree of trust that is developed for companies who have enough resources to do such a thing. It may not always be wise, but I don't think it's being tricked.
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Oh, a full model would have to include some trickery! However, in general I think the smart set overweights explanations for things that assume the public is foolish. I think alternative models tend to be underrated.
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Advertising creates common knowledge beliefs about products and services that people must respond to when playing social games. That people respond to those changes in meaning by sometimes paying extra does not mean they benefitted (in aggregate). Far from it.
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Not “only”. On some of my keywords it would take a vigorous 30 minutes of link exploration to find the services (or equivalent alternatives) offered in the top 5 ads.
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Exactly.
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Information asymmetry is our default! Ads can hack our trust but primarily serve to inform and motivate. If you want better info you pay for it with effort.
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