What Goes Up Must Come Down

 

“Why do you think those adverts on TV are repeated so often? “

Many years ago this question was posed in an informal discussion, quite out of any context, by scientist and TV personality Professor Heinz Wolff.  It emerged from an insatiable curiosity about everything that is a hallmark of both the engaged scientist and innovator.  Memories of the day have long faded, except for that question.

Photo by P. G. Champion

Professor_Heinz_Wolff

The fact that such a mundane question can be posed by so eminent a scientist suggests that the answer might be important.  The same TV advertisements are indeed broadcast repeatedly.  They are expensive and so the benefits of doing so must be appreciable.  We have now reached a point to sketch an outline of what an answer might look like.

Adverts communicate information that enables TV viewers to perceive the value of their associated products or services.  In the vocabulary of this website, the broadcast information creates instances of Consumer Product Interaction with a consequent consumer perception of value.  A viewer may feel a closer association with their sporting hero by wearing the brand he is commissioned to promote.

The raising of value perceptions has been imagined as the elevation of a huge, wobbly marque-like structure referred to as a Value Surface, on which a single point marks an individual’s response at the time of that Consumer Product Interaction.  This value perception may subsequently go up or down depending on whatever information follows.  News of a drug scandal degrades the image of the sportsman and his sponsored products.  The Value Surface in its entirety is forever in an agitated seascape motion that is hopefully nudged upwards by each broadcast advertisement.

One mechanism of action for the advertisements is through the classical conditioning discussed in the previous post.  Just as the dogs of Pavlov could be taught to associate the sound of a bell with the arrival of food, the information and images in the advert may evoke an equivalent response in value perceived for the associated products or services.  Recognition of brand attributes has been associated with conditioned responses by Janiszewski and Warlop (2013) .

The requirement to frequently rebroadcast the same information clearly indicates that the association with value needs continual reinforcement.  This could be necessary to increase the number of recipients or enhance value perceived, that is to increase the overall breadth or height of a Value Surface.  TV advertisements certainly have a huge reach.  It is also possible that residual perceived value following the advertisement broadcast might naturally diminish without the subsequent reinforcement of the message.  One might consider that the advert has a role in propagating ideas as a meme, as discussed in New Economics of Innovation, which is analogous to the viral propagation of genetic information.  At any time there are many other possibly conflicting memes competing for survival in the consciousness of a recipient population.   Advertising agencies and media companies alike have done well out of this silent struggle.

With so much content passing every second through the information environment, markets might well be naturally forgetful.  We will explore this idea in more detail later.  At this point we should note that it is often hard work to raise a Value Surface and then to keep it aloft.  This effort appears in the investments and endeavours made by an enterprise and entrepreneur in making their information valuable.  Next we will transform the Value Surface into a single point that represents perceived value for a whole population of consumers.

 

The Neural Roots of an Economic Trajectory

The Value Surface concept discussed above and elsewhere is essentially a micro-analysis of the behaviour of a population of consumers[1].  This is needed to construct and interpret the viscoelastic-derived model that has been used to simulate the commercial operations of an enterprise.  To provide a more macroscopic view of that enterprise, we can collapse the three dimensions of the Value Surface into a single point that is representative of the entire value-creating innovative activities at a particular moment in time.

Taking the average across the multiple perceptions of value for a consumer population gives a single measure of height to which a product can be elevated by the endeavours of an enterprise[2].  Clearly some products will be more difficult to raise than others. The resistance to this elevation will be different for different products, and will inversely represent how attractive they are to their consumers. We can then follow this point of average perceived value with time to draw a trajectory of a product through an economic space.  The role of the enterprise is to “fly” the product through this space, as described in the companion Foreground papers: An Economic Trajectory  and Flightpaths and Forgetful Markets.

Here, with more freedom to speculate, we will consider the neural origins of a potential field through which an economic entity might fly.

In Valoris Cognita Barcelona we have considered how a person’s brain may interpret information received through the senses to build and adapt a continuously changing model of reality.  Consciousness may be considered to arise from an elimination of the errors that separate neural cognition from external reality.  It is a descent down an “error surface” to a point that is satisfactory for survival, but which inevitably leaves some unimportant residual error with an associated subjective perception.

Whilst the electrical impulses and neuro-chemical transmission of information that arise in neural cells and synaptic connections is clearly powered by the host individual, a neural model of reality may be changed by this information flow to become less transient and more ordered to some degree by the memories it engenders.  This explanation needs help from an analogy with another energy dissipative system.

In Writing the Information we considered various systems through which energy flows and thereby transforms the system that is its conduit.  One such example was the flow of water down a mountainous terrain.  The water flow itself was driven by its inherent potential energy acquired due to its height.  The direction of flow is not random but clearly follows a path to descend to the lowest point as fast as possible, and in doing so it sculpts distinctive river valleys into the terrain that serve to further accumulate and direct the water flow and erosion.  In summary, whilst the flow originates from the potential energy of the water and is transient, semi-permanent features are created and remain long after their creation.  In these features are written the full history of previous torrents through the energy dissipative erosive events they have engendered.

Could the energy flows through neural circuity have left similar features that we call memories through associated energy dissipative events?

Water Erosion Pattern

Could the information content that is etched into a brain and into individual neural models of reality be the source of potential energy fields we have hypothesised as resisting the elevation of a Value Surface and its associated Economic Trajectory?

Could a continuous neural remodelling response to new information together with the competition for vital attention explain why signals that are not reinforced dissipate leading to a natural forgetfulness of markets?

Can innovation that is making information valuable actually be a physical phenomenon or should we be content to have a suitable physical analogue of this fundamentally social process?

The latter question may not be as outrageous as it may first seem.  We have discussed in Semantics of Information that deletion of information has thermodynamic consequences.  There are similar issues in other domains for which information may have a physical manifestation.

 

Applying  Landauer’s principle to the information content of the universe  M. Paul Gough (2008) calculates that an information energy makes a significant contribution to the dark energy that is hypothesised to have determined the dynamics of the expanding universe throughout its entire history.

 

NASA and the European Space Agency.
Hubble_ultra_deep_field_largeNASA’s Hubble telescope reveals around 10,000 galaxies with the deepest view into the history of the Universe.

So why are adverts on TV repeated so often?

Imagine a world without the repeated marketing needed to encourage product purchase.  The dynamics of an economic trajectory indicate that goods may not simply remain frozen in space.  The potential retained within the Value Surface has already been diminished by previous Sale Events.  Now, the inevitably dynamics of descent will be brought into play and there will begin an increasing rate of loss of information in a reversal of the previous ascent phase of the trajectory.  Investment and prices will fall as companies seek to convert the residual potential in the collapsing Value Surface into income and consumers will forget how they once valued the goods.

This dynamic mechanical analogy provides an explanation for why commercial television repeats and repeats again advertisers’ content.  It provides an explanation of why salespersons continually need to repeat and reinforce the value proposition of their products.  So finally we can propose a derivative of the Labour Theory of Value Creation where labour is also working to prevent the depreciation of that value due to a natural forgetfulness of dynamic markets.  Innovation has a role therefore, not only in making information valuable in the first instance, but also in retaining the value of the information and opposing a tendency for that value to decline with time as a product matures.

As it is with commodities and technologies, so it is with whole companies that integrate the value of their various commercial activities.  The value of the company as it appears in its stock market valuation depends ultimately on the effective deployment of capital to propel the company on its own economic journey.  The forgetfulness of the market appears in the fluctuating patterns of valuation of public quoted stock.  Memories are short and a regular injection of good news is needed to counter a fall in value.  Volumes of press releases evidence this common practice. The similarity of the qualitative nature of the economic trajectories of commodities, technologies and companies, whilst these may differ substantially in time and duration, together with the voraciousness of consumers to absorb this “vital” information, point to a similar cause and effect arising from the action of an economic potential field.

 

Multiple images of beautiful independence might well convince a receptive individual of the transcendental properties of a particular perfume.

In doing so, their need to be repeated on multiple occasions may be essential to overcome a natural forgetfulness of the fragrance market.

 

 Dior j'adore sm

 Notes:

[1] It may be considered equivalent to the statistical mechanics description of the thermodynamics of a liquid or a gas, which is at the origin or models of economics developed by Paul Samuelson et al.

[2] Some consequences of taking an average measure of value perception are considered in A Labour Theory of Value Creation.

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