This makes me think of charities. Suppose I'm trying to raise money for cancer research. Maybe I tell my friends and raise $100k. I then give that $100k to a re

This makes me think of charities. Suppose I'm trying to raise money for cancer research. Maybe I tell my friends and raise $100k. I then give that $100k to a research lab. The next year I raise $100k again, except that this time, I spend that money on advertisements telling people to donate to my charity. I raise $300k that way, netting me $200k which I give to the lab. My contribution to cancer research has doubled, yay! But this time, I raised a total of $400k, so for the donors (consumers), a dollar of cancer research now costs two dollars. I (the firm) became more sophisticated and in some ways more efficient, but in other ways less efficient. Costs to the consumer went up, but now I'm the dominant cancer charity. Other charities trying to raise money can't compete since nobody has heard of them, and their message isn't crafted by highly-paid marketers. To compete, they have to raise prices too! I remember this being a big controversy in charities a few years ago. The analogous scenario with for-profit firms making widgets is straight-forward. I wonder what role this kind of mechanism could be playing in cost disease?