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Economists credit ads with two welfare‑enhancing roles: 1. Informative – trimming search costs (Stigler 1961 (pdf)). 2. Signaling – In classic models, high-quality sellers are more willing to incur large, sunk ad costs because they expect to recoup them through future sales, especially in experience-good markets where…
In a service with capacity $\mu$ requests per second and background load $\lambda_0$, the usable headroom is $H = \mu - \lambda_0 > 0$. When $M$ clients align, e.g., after a cache expiry, at a cron boundary, or as a service returns from an outage, the bucketed arrival rate can