Advertising can make some markets more competitive and others less. I think the determining factor has to do with how similar the product actually is. For example, most consumers would agree that among cola products there are definite and distinct differences. So, when Coca Cola advertises better taste, they are actually providing factual information about their product - it doesn't taste the same as other colas. Likewise for Pepsi. In this way, consumers are encouraged to try many different firm's versions of cola to decide which they like best, increasing competition. On the other hand, when products really are identical - generic vs. name brand medications, advertising can misinform consumers into thinking that the name brand drug is better. Especially when they can't detect a difference, consumers are more likely to trust the advertising and not try the generic, hence making the market less competitive.
I found it interesting that an economic debate over the benefits of advertising even existed. I took for granted that advertising was a necessary evil in the world of capitalism. I see both sides of the argument but I agree with Galbraith's opinion, that more government regulation could help offset some of the negative effects of advertising. I also agree that public perception is easily manipulated to the financial benefit of firms but to the detriment of unconscious consumers and that the advertising machine is having an overall negative effect on society.
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