People care less about their
grandchildren's future than about their own. This is because
predictions concerned with the far future are highly uncertain and
investors refuse to base current decisions on fuzzy "what ifs".
This is a problem because many current investments, such as the fight
against global warming, are likely to yield results only decades hence.
There is no effective method of cost/benefit analysis applicable to
such time horizons.
How are consumer choices influenced by advertising and by pricing? No
one seems to have a clear answer. Advertising is concerned with the
dissemination of information. Yet it is also a signal sent to consumers
that a certain product is useful and qualitative and that the
advertiser's stability, longevity, and profitability are secure.
Advertising communicates a long term commitment to a winning product by
a firm with deep pockets. This is why patrons react to the level of
visual exposure to advertising - regardless of its content.
Humans may be too multi-dimensional and hyper-complex to be usefully
captured by econometric models. These either lack predictive powers or
lapse into logical fallacies, such as the "omitted variable bias" or
"reverse causality".
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