Question
I am working on this assignment and need help please: Previous research suggests that many firms 'over - invest' in advertising - meaning spend beyond
I am working on this assignment and need help please: Previous research suggests that many firms 'over - invest' in advertising - meaning spend beyond a point where advertising positively affects a firm's bottom line (if interested see here:Advertising Effectiveness) . Game Theory can explain some of this, but not all. What else can explain why many firms over invest in advertising? Are there are any reasons for firms to advertise beyond wanting to increase profits? Note: two recent Freakonomics on this topic can be found here:https://freakonomics.com/podcast/advertising-part-1 andhttps://freakonomics.com/podcast/advertising-part-2 You don't have to listen to both podcasts to answer the question but I recommend it anyway.
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