Hello and welcome to Planet Money Summer School.

The sweetest course in economics sense that candy cartel you cooked up with your sister

after Halloween.

This is class number seven, advertising and race.

I'm Robert Smith.

It is our second to last class.

Next week we'll be opening up our online final exam for your chance at a Planet Money

Diploma, which I'm told, has real Latin on it.

You cannot fake that.

This week we're going to consider an anomaly in economics.

In the classic economic models that we've talked about so far, you have perfectly rational

and informed consumers who choose different products based on price and utility, as if.

We all know that the choices that we make get swayed by all sorts of factors that are

more psychological than economic, and advertising fits into that category.

Today in class, we wanted you to think about the economics and psychology of advertising.

How much information do you have as a consumer?

And how much information does a company have about you as a segment of the market?

Before we talk about that, though, we wanted you to listen to one of our favorite episodes

that we have ever done.

It was called This Ads for You, and I co-hosted it with Sonari Glinton.

It's about a man named Tom Barrell.

Back in the 1950s, Tom Barrell was in high school, and he had to take one of those aptitude

...