Is advertising rational?

Abstract

Advertising is not a process by which gullible consumers are persuaded to buy things they don't want, according to the authors of this paper. Instead, it furnishes consumers with some useful information. It is not so much the claims made by advertisers that are helpful, but the fact that they are willing to spend extravagant amounts of money on a product that is informative. The authors find tentative evidence for this view of advertising and discuss its implications.