This chapter begins by considering the question of how cultural practices such as rituals and ceremonies constitute power. It then discusses how rituals work; generating common knowledge through eye contact or, for larger groups, facing each other in a circle to enable each person to see that everyone else is paying attention; and understanding advertising in terms of common knowledge generation. The chapter then offers quantitative evidence by looking at 119 brands advertised on three U.S. networks in October 1988, February 1989, and July 1989. The data suggests that social goods are advertised on more popular shows and that advertisers goods are willing to pay more per viewer to do so. More popular shows generate common knowledge and hence are better at solving coordination problems.
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