These days how can we know which items are good and which one is bad?
Most of cases we are affected by advertisements via mess medias such as TV or newspapers.
It is reasonable to say that the items that spend expensive advertisement cost are probably valuable. Because if the producers are not so much confident for their items, they would not spend that much costs.
I think cars are good examples for that. Most of people don't have enough knowledge for details of cars. We rely on their reputations which is built up by advertisements, or more simply rely on their price tags.
However, it doesn't always work. A good example is some of advertisements in mess medias in order to cover their shortcomings. In Korea most of big companies purchase big advertisements whenever they attack union activities. They pay their money to mess media themselves in order to control the articles of the media.
Those information from advertisements are all from producers not from customers. Producers value their own items, which seems weird in some sense.
In contrast, there are several ways to spread information for some items from customers not from producers. A good example for this is probably Google.
How could Google prevailed Yahoo. It is certainly because of the quality of searching results. Yahoo showed searching results, with ranking each URL by how much the owners of the URL payed to Yahoo, while Google showed searching results, with ranking each URL by how many other web sites linked the URL. I think the prior way relies on the information from producers, as I mentioned earlier, and the latter way does with the information from customers.
Many of economists believed in the story that "price" indicates where resources should go to; in other word the price embraces information to go. However, it cannot explain the difference between Yahoo and Google. The searching results of Yahoo are, of course, evaluated by "the price" either.
I like to conclude that we need to see where the information for the price came from. I agree that "the price" is a good way to evaluate how much a item is valuable. However when we see the source of the price information, it may vary from certain numbers of producers only to countless customers. Furthermore, the information can appear without any price tag, as we have seen in Google and some of protests.
*PS: This article is influenced by a Ted movie clip: Open source economics.