Re: Financing of media. "kl811af@sunmail.lrz-muenchen.de" at Jul 27, 94 05:10:36 pm

[Herbert Gintis <gintis@xxxxxxxxxxxxxxx>]

>> 	E.g., Coke and MacDonalds advertize like crazy, but people want
>> their products without the advertizing (fast food). That's why they
>> have no trouble expanding into new markets around the world.
>
>Do you have any scientific evidence for this contention and the more
>general one, that advertizing doesn't change preferences? I would rather
>guess that that's part of some (sorry:) neoclassical creed.

	I hope an expert in the field can resolve this. I did review
the literature about ten years ago, and that is the basis for my
assertion. I don't remember the references, though.

>More generally: What we observe is much advertizing by McDonalds and it's
>worldwide success. The natural suspicion would be that the one has to do
>with the other. Who claims otherwise should deliver extremely
>compelling evidence.
>
	What you observe is a correlation between success and level of
advertizing. From that you can't derive causality. McDonald's was
small and grew like crazy because people liked it. Only when there
arose copy-catter (Burger King, Jack in the Box, et al.) was
advertizing vaulted to a prominent place in their growth strategy.
They advertize as a way to compete against other fast-food providers.
To say that advertizing increases the volume of fast-food sales is in
no way warranted.

Herb gintis@xxxxxxxxxxxxxxx