The ‘Cobra Effect’ in Advertising

Summary: The interesting thing about advertising is that it employs many different schools of thought, from art and sociology to business and psychology. We believe that an economist could be just as successful in AdLand as a writer, or a creative just as wanted as a business analyst.

When it comes to consumer behavior and why people do the things they do, we see wonderful symmetry with the fields of economics and advertising. One could say that as economics is the study of “choice under scarcity” and advertising is the means of displaying the choices and highlighting the scarcity.

Today the highlight is the “cobra effect.” It was covered recently by the Freakonomics writers.