In a Time oped titled "Merry Hallowmas", Nancy Gibbs complains that corporations are forcing a longer holiday season on us, for nefarious reasons: "A perpetual Holiday," George Bernard Shaw said, "is a good working definition of hell." This year the perennial ruckus over little girls’ slutty Halloween costumes was still going strong even as the perennial ruckus over the War on Christmas began. It’s as though we’ve supersized our holidays, so that they start sooner, last longer and cost more, until the calendar pages pull and tear, and we don’t know which one we are meant to be celebrating. …
The America you see during Merryhallowthankmas is the real America. This is what people are really like and what they're really about if you dug deeper, which is neither what they're really like and really about if you dug a bit deeper than that. In any case "normal" is not what its label would suggest.
I think story-time would illustrate the fallacy here nicely.
Frank is a drug-dealer in Appleton but nobody is buying any of his drugs. If you ask the people of Appleton, they say are not interested in his drugs. They much prefer TV and jewelry. So it goes.
Frank begins advertising to convince people that drug use has a great value proposition--he even offers the first dose free of charge! Free doesn't cost anything, the people say, so some try it and discover they like it. In fact, they like it so much, they start selling their TVs and jewelry. What a wonderful thing! The market has helped them discover something they value more highly! In fact, the people buy so much that Frank can achieve economies of scale and offer the same product for lower prices, so now everyone wins! All praise the Market (peace be upon it) for it is truly benevolent.
That's all for story time this week. Next week: Frank's a monopolist no longer, as George enters the market. George and Frank get into a price war and once again, consumers benefit!
As a newby here, I'm amused by this post string. Robin's original post could just about pass as a Grinchy 3rd op-ed designed to amuse. Let's leave it at that. There is scope for a serious piece on retailer led or consumer led behaviour patterns, but clearly we're nowhere near that here. My serious thanks to 'mtravern' for solid applied sense.
Indeed, M. It seems that several people are working actively to promote bias rather than overcome it. Not terribly well either:
M. I believe sales have been tried across the entire spectrum of ad intensity.
A statement of belief, with no evidence given.
The ones you see in practice today are simply the most successful of those types.
A statement of conjecture, with no evidence or supportive reason given.
If people truly didn't want or value ads, then a mutant firm would come in without ads and take over the market.
A statement of conjecture, with no evidence or supportive reason given.
Then a new equilibrium would emerge as others copycat.
A statement of conjecture, with no evidence or supportive reason given.
There is a brand of sun tan lotion called "No-Ad" lotion. It sells in many drugstores and is less than Hawaiian tropic and other name brands. (They claim on the bottle that they take the savings from not promoting their product and give it as a discount to you, the valued customer.) If you really need evidence, the miniscule market share of No-Ad should be it.
The first statements I quoted are merely evidence of an economic dogma. But this paragraph actively descends into extremely poor reasoning, as well as demonstrating a lack of conviction in the scientific method. First, the poster has confused converses with contrapositives; if the situation is as described, then the observation of poor market sales for products with small advertising outlays would be in accordance with it. But the observation that there exists products with poor market share and that also do not have an advertising budget per se does not prove that "the consumers" want advertisement (take that as a paraphrase for those who wish to use narrow interpretations as a debate tactic.) In fact, the only thing examples of this nature can do is disprove the hypothesis, which they do. I used to work for DataStorm in the mid-90's. They produced modem connection software called 'Procomm' which was considered a superior product back in the day, and made it a point of pride to spend very little in advertising, in fact, went out of their way to promote it by word of mouth. If the libertarian types are correct, this company should have gone out of business due to poor advertising. In point of fact, they did not. Ipso facto, libertarians are wrong again, and the hypothesis has been disconfirmed.
The other odd point is the posters apparent surprise that evidence to support the claim is requested. Isn't that the exact opposite of what overcoming bias is trying to promote?
Well, No-Ad is at least some evidence for something, although it's rather weak -- just one product, which could have small market share for any number of reasons, such as poor distribution.
The reality is that advertising functions as a form of signalling -- major brand names indicate major coporations indicate (and create) a large market share, which generates consumer trust, rightly or wrongly (a brand you've never heard of might have something wrong with it, but if everybody uses CopperTone you can assume that it's a reasonably safe choice).
So advertising is an important part of the psychology of consumer choice. That doesn't mean that people actively want advertisements.
I can see that my request for one of the many economists who haunt this blog to chime in with some actual economics will go unanswered, fortunately Google coughed up this excellent survey article as the first hit. People have actually studied this stuff.
M. I believe sales have been tried across the entire spectrum of ad intensity. The ones you see in practice today are simply the most successful of those types. If people truly didn't want or value ads, then a mutant firm would come in without ads and take over the market. Then a new equilibrium would emerge as others copycat. But it hasn't happened.
There is a brand of sun tan lotion called "No-Ad" lotion. It sells in many drugstores and is less than Hawaiian tropic and other name brands. (They claim on the bottle that they take the savings from not promoting their product and give it as a discount to you, the valued customer.) If you really need evidence, the miniscule market share of No-Ad should be it.
(Please excuse the length of what follows. There seems to be enough misunderstanding going around to justify sacrificing brevity for clarity.)
It seems plausible to me that the situation is as follows.
1. When a given merchant issues another advertisement, or begins their season of holiday promotions one day earlier, this brings them some extra profit (which they may or may not use to lower prices). It also reduces other merchants' profits (which may or may not lead them to increase prices).
2. The net benefit to the customer -- probably also to the merchants in aggregate -- of this increased advertising, or longer holiday season, is negative. But it's positive to each individual merchant, so they'll do it.
3. Supposing for the sake of argument that merchants respond to bigger or smaller profit by lowering or raising their prices, when FooCo issues another advertisement their customers do indeed benefit from lower prices on FooCo products. But they also suffer from higher prices on products from FooCo's competitors, and from having to endure being advertised at more.
4. (This shouldn't need spelling out, but...) The fact that the customer loses overall doesn't contradict the fact that FooCo gains from increased advertising. Advertising influences people even if they don't like it. (That's a large part of why some of us don't like it.) So does a longer holiday season. "Oh, good grief, are FooCo really starting their Christmas promotions in July? Ugh. Still, since I have to suffer the stupid signs and lights and things anyway, I might as well take what advantage I can."
Of course I don't know that the externalities really do make the effect of more advertising a net minus for everyone. Maybe everyone gains. Or maybe the merchants gain overall but the customer loses. It's hard to tell.
And the point, of course, is that in the absence of some actual evidence that the customers gain, or at least that merchants can reasonably expect that customers will gain, it is simply not correct to assert that the customers "want" or "demand" what they are being given. Yes, businesses respond to predicted customer demand. That demand is partially under their control, and their manipulations of it may make end up making everyone worse off.
Aliter: The path from a shorter holiday season to a longer one has two steps. First, some businesses offer longer holiday seasons. Then, customers choose those businesses over their rivals. You cannot conclude from the second of these that customers prefer a longer holiday season. All you can conclude is that when already faced with a longer holiday season, they make the best of it. They might (and likely do) prefer a situation in which none of the businesses makes them that offer, because *the offer itself has negative value to them*.
Iow, you have no evidence for your claim. Something you could have said many posts ago.
More tellingly, however, you refuse to post any possible evidence that would refute your claim. So I agree with this observation made by an earlier poster:
I hope this does not come across as rude, but your comments in this thread come across as having been written by a very intelligent person who is blinded to arguments because he has built his identity around a libertarian wordview: if that's what the market produces, it can't be bad.
Now, you can claim you're not a libertarian, but that's simply not what I or others see. It is nice to know, however, that the company of libertarians are not being sought out these days. Hopefully, libertarianism will take it's place alongside other discredited institutions such as communism and socialism - an intellectual movement having it's roots in the nineteenth century and thoroughly played out by the end of the twentieth.
That was said rather tongue-in-cheek, and, like some other people have already noted, I think that's simulating obtuseness.
And which, in any case has nothing to do with my questions about your specific evidence for this claim, and your evidentiary standards. Again, what are they? What evidence do you have for your claims? What observations would lead you to disavow your hypothesis? These are simple questions. And something it now looks like you are deliberately avoiding answering. I would be happy to be proved wrong on that last.
Scent, I made no claim "that this is the best of all possible outcomes." I am not saying we have exactly the right amount of ads or of holiday decorations. I said retailers respond to anticipated consumer demand for ads, quality, and price.
"All Nature is but Art, unknown to thee;All chance, direction, which thou canst not see;All discord, harmony, not understood;All partial evil, universal good:And, spite of pride, in erring reason's spite,One truth is clear, Whatever is, is right."
And Robin still hasn't provided any evidence that this is the best of all possible outcomes. In fact:
M, the main evidence that people want something is the fact that they choose it relative to alternatives. The fact that people choose context with ads, over other contexts, suggests that people like the net effects. This is all standard microeconomics.
Seems to have been rather forcefully rejected as 'evidence'. And given that it is the person making the claim that has the burden of proof, I'd say Robin has failed to be persuasive. So I'll repeat the question, albeit in a slightly altered form: what evidence would he take to show that his statement is incorrect?
M, no one claims the market offers an infinite array of independent choices. Not all feature combos are actually offered at any one time. Nevertheless, firms anticipate consumer demand for each feature when choosing product combos to offer.
Lemmus, I admit many, perhaps most, consumers would rather see fewer untargeted ads, all else equal. But since the cost of providing ads is usually negative, all else is not equal, and consumers can easily prefer a cheaper or higher quality product that includes ads.
Argh. tggp, you've known me long enough to suppose that I might understand the basic economics of advertising and advertising-supported media. I was not proposing to ban advertising, or even suggesting that advertising or advertisers are evil. I was making the somewhat more subtle argument, which I didn't think was so subtle that I would have to repeat it three different times and still not have it understood, that the market does not present an infinite array of independent choices. In real life, choices are limited and bundled together. So if I want to read the latest T. C. Boyle short story in the New Yorker, I don't have the option of buying an advertsing-free version of the New Yorker, just the one actually existing version, with ads. Similarly, to a first approximation I don't have the option of shopping in ad- or holiday-free environments, and this proves nothing at all about consumer preferences for ads and holidays.
If someone can produce a real argument from economics that I'm wrong, cool, but so far I've just gotten various attempts to patronize me while missing the point.
The America you see during Merryhallowthankmas is the real America. This is what people are really like and what they're really about if you dug deeper, which is neither what they're really like and really about if you dug a bit deeper than that. In any case "normal" is not what its label would suggest.
but thats ignoring social effects and the effects of advertising!
I think story-time would illustrate the fallacy here nicely.
Frank is a drug-dealer in Appleton but nobody is buying any of his drugs. If you ask the people of Appleton, they say are not interested in his drugs. They much prefer TV and jewelry. So it goes.
Frank begins advertising to convince people that drug use has a great value proposition--he even offers the first dose free of charge! Free doesn't cost anything, the people say, so some try it and discover they like it. In fact, they like it so much, they start selling their TVs and jewelry. What a wonderful thing! The market has helped them discover something they value more highly! In fact, the people buy so much that Frank can achieve economies of scale and offer the same product for lower prices, so now everyone wins! All praise the Market (peace be upon it) for it is truly benevolent.
That's all for story time this week. Next week: Frank's a monopolist no longer, as George enters the market. George and Frank get into a price war and once again, consumers benefit!
As a newby here, I'm amused by this post string. Robin's original post could just about pass as a Grinchy 3rd op-ed designed to amuse. Let's leave it at that. There is scope for a serious piece on retailer led or consumer led behaviour patterns, but clearly we're nowhere near that here. My serious thanks to 'mtravern' for solid applied sense.
Indeed, M. It seems that several people are working actively to promote bias rather than overcome it. Not terribly well either:
M. I believe sales have been tried across the entire spectrum of ad intensity.
A statement of belief, with no evidence given.
The ones you see in practice today are simply the most successful of those types.
A statement of conjecture, with no evidence or supportive reason given.
If people truly didn't want or value ads, then a mutant firm would come in without ads and take over the market.
A statement of conjecture, with no evidence or supportive reason given.
Then a new equilibrium would emerge as others copycat.
A statement of conjecture, with no evidence or supportive reason given.
There is a brand of sun tan lotion called "No-Ad" lotion. It sells in many drugstores and is less than Hawaiian tropic and other name brands. (They claim on the bottle that they take the savings from not promoting their product and give it as a discount to you, the valued customer.) If you really need evidence, the miniscule market share of No-Ad should be it.
The first statements I quoted are merely evidence of an economic dogma. But this paragraph actively descends into extremely poor reasoning, as well as demonstrating a lack of conviction in the scientific method. First, the poster has confused converses with contrapositives; if the situation is as described, then the observation of poor market sales for products with small advertising outlays would be in accordance with it. But the observation that there exists products with poor market share and that also do not have an advertising budget per se does not prove that "the consumers" want advertisement (take that as a paraphrase for those who wish to use narrow interpretations as a debate tactic.) In fact, the only thing examples of this nature can do is disprove the hypothesis, which they do. I used to work for DataStorm in the mid-90's. They produced modem connection software called 'Procomm' which was considered a superior product back in the day, and made it a point of pride to spend very little in advertising, in fact, went out of their way to promote it by word of mouth. If the libertarian types are correct, this company should have gone out of business due to poor advertising. In point of fact, they did not. Ipso facto, libertarians are wrong again, and the hypothesis has been disconfirmed.
The other odd point is the posters apparent surprise that evidence to support the claim is requested. Isn't that the exact opposite of what overcoming bias is trying to promote?
Well, No-Ad is at least some evidence for something, although it's rather weak -- just one product, which could have small market share for any number of reasons, such as poor distribution.
The reality is that advertising functions as a form of signalling -- major brand names indicate major coporations indicate (and create) a large market share, which generates consumer trust, rightly or wrongly (a brand you've never heard of might have something wrong with it, but if everybody uses CopperTone you can assume that it's a reasonably safe choice).
So advertising is an important part of the psychology of consumer choice. That doesn't mean that people actively want advertisements.
I can see that my request for one of the many economists who haunt this blog to chime in with some actual economics will go unanswered, fortunately Google coughed up this excellent survey article as the first hit. People have actually studied this stuff.
M. I believe sales have been tried across the entire spectrum of ad intensity. The ones you see in practice today are simply the most successful of those types. If people truly didn't want or value ads, then a mutant firm would come in without ads and take over the market. Then a new equilibrium would emerge as others copycat. But it hasn't happened.
There is a brand of sun tan lotion called "No-Ad" lotion. It sells in many drugstores and is less than Hawaiian tropic and other name brands. (They claim on the bottle that they take the savings from not promoting their product and give it as a discount to you, the valued customer.) If you really need evidence, the miniscule market share of No-Ad should be it.
(Please excuse the length of what follows. There seems to be enough misunderstanding going around to justify sacrificing brevity for clarity.)
It seems plausible to me that the situation is as follows.
1. When a given merchant issues another advertisement, or begins their season of holiday promotions one day earlier, this brings them some extra profit (which they may or may not use to lower prices). It also reduces other merchants' profits (which may or may not lead them to increase prices).
2. The net benefit to the customer -- probably also to the merchants in aggregate -- of this increased advertising, or longer holiday season, is negative. But it's positive to each individual merchant, so they'll do it.
3. Supposing for the sake of argument that merchants respond to bigger or smaller profit by lowering or raising their prices, when FooCo issues another advertisement their customers do indeed benefit from lower prices on FooCo products. But they also suffer from higher prices on products from FooCo's competitors, and from having to endure being advertised at more.
4. (This shouldn't need spelling out, but...) The fact that the customer loses overall doesn't contradict the fact that FooCo gains from increased advertising. Advertising influences people even if they don't like it. (That's a large part of why some of us don't like it.) So does a longer holiday season. "Oh, good grief, are FooCo really starting their Christmas promotions in July? Ugh. Still, since I have to suffer the stupid signs and lights and things anyway, I might as well take what advantage I can."
Of course I don't know that the externalities really do make the effect of more advertising a net minus for everyone. Maybe everyone gains. Or maybe the merchants gain overall but the customer loses. It's hard to tell.
And the point, of course, is that in the absence of some actual evidence that the customers gain, or at least that merchants can reasonably expect that customers will gain, it is simply not correct to assert that the customers "want" or "demand" what they are being given. Yes, businesses respond to predicted customer demand. That demand is partially under their control, and their manipulations of it may make end up making everyone worse off.
Aliter: The path from a shorter holiday season to a longer one has two steps. First, some businesses offer longer holiday seasons. Then, customers choose those businesses over their rivals. You cannot conclude from the second of these that customers prefer a longer holiday season. All you can conclude is that when already faced with a longer holiday season, they make the best of it. They might (and likely do) prefer a situation in which none of the businesses makes them that offer, because *the offer itself has negative value to them*.
Iow, you have no evidence for your claim. Something you could have said many posts ago.
More tellingly, however, you refuse to post any possible evidence that would refute your claim. So I agree with this observation made by an earlier poster:
I hope this does not come across as rude, but your comments in this thread come across as having been written by a very intelligent person who is blinded to arguments because he has built his identity around a libertarian wordview: if that's what the market produces, it can't be bad.
Now, you can claim you're not a libertarian, but that's simply not what I or others see. It is nice to know, however, that the company of libertarians are not being sought out these days. Hopefully, libertarianism will take it's place alongside other discredited institutions such as communism and socialism - an intellectual movement having it's roots in the nineteenth century and thoroughly played out by the end of the twentieth.
Scent, I am not going to post a summary of the evidence for the standard results of an entire discipline.
That was said rather tongue-in-cheek, and, like some other people have already noted, I think that's simulating obtuseness.
And which, in any case has nothing to do with my questions about your specific evidence for this claim, and your evidentiary standards. Again, what are they? What evidence do you have for your claims? What observations would lead you to disavow your hypothesis? These are simple questions. And something it now looks like you are deliberately avoiding answering. I would be happy to be proved wrong on that last.
Scent, I made no claim "that this is the best of all possible outcomes." I am not saying we have exactly the right amount of ads or of holiday decorations. I said retailers respond to anticipated consumer demand for ads, quality, and price.
"All Nature is but Art, unknown to thee;All chance, direction, which thou canst not see;All discord, harmony, not understood;All partial evil, universal good:And, spite of pride, in erring reason's spite,One truth is clear, Whatever is, is right."
-- Alexander Pope, Essay on MicroeconomicsMan
And Robin still hasn't provided any evidence that this is the best of all possible outcomes. In fact:
M, the main evidence that people want something is the fact that they choose it relative to alternatives. The fact that people choose context with ads, over other contexts, suggests that people like the net effects. This is all standard microeconomics.
Seems to have been rather forcefully rejected as 'evidence'. And given that it is the person making the claim that has the burden of proof, I'd say Robin has failed to be persuasive. So I'll repeat the question, albeit in a slightly altered form: what evidence would he take to show that his statement is incorrect?
M, no one claims the market offers an infinite array of independent choices. Not all feature combos are actually offered at any one time. Nevertheless, firms anticipate consumer demand for each feature when choosing product combos to offer.
Lemmus, I admit many, perhaps most, consumers would rather see fewer untargeted ads, all else equal. But since the cost of providing ads is usually negative, all else is not equal, and consumers can easily prefer a cheaper or higher quality product that includes ads.
Argh. tggp, you've known me long enough to suppose that I might understand the basic economics of advertising and advertising-supported media. I was not proposing to ban advertising, or even suggesting that advertising or advertisers are evil. I was making the somewhat more subtle argument, which I didn't think was so subtle that I would have to repeat it three different times and still not have it understood, that the market does not present an infinite array of independent choices. In real life, choices are limited and bundled together. So if I want to read the latest T. C. Boyle short story in the New Yorker, I don't have the option of buying an advertsing-free version of the New Yorker, just the one actually existing version, with ads. Similarly, to a first approximation I don't have the option of shopping in ad- or holiday-free environments, and this proves nothing at all about consumer preferences for ads and holidays.
If someone can produce a real argument from economics that I'm wrong, cool, but so far I've just gotten various attempts to patronize me while missing the point.