FREE TO CHOOSE

I just got back from a bit of caffinated kvetching with Will Wilkinson and Tim “Undercover Economist” Harford about the recent spate of books bemoaning how affluence and the glut of market choices that go with it are making us all miserable—The Paradox of Choice and its many precursors and clones. Critiques of the “choice paralysis” argument typically focus on questions like whether the empirical data really does demonstrate more choices make people unhappy, and if they do, whether it’s not part of a temporary adjustment period as we become more adept at narrowing our choices in response to the glut—as, for instance, social filtering software such as Amazon uses makes it increasingly easier to do. But Harford pointed to a good John Kay piece that makes an elementary but underemphasized point:

The choice between Tweedledum and Tweedledee may not matter much to the chooser but it matters a lot to Tweedledum and Tweedledee.

In other words: Maybe ceteris paribus having to pick from 20 very similar sorts of corn flakes at the supermarket is just an added hassle, and we’d be just as well off if the supermarket only stocked one or two of them. But ceteris ain’t never paribus: Having to compete with 19 other close substitues puts strong price and quality pressure on each manufacturer. So it’s not enough to point out that choice between a gaggle of similar products might be more annoying than a choice between some small subset of those same products—if the choice set were persistently limited for everyone, then you wouldn’t have those same products, put probably significantly worse ones. The fact that some people agonize over which of a dozen sorts of corn flakes to buy means you’re likely to do better picking one at random than if you agonized over the choice between the only two brands in the world.

—posted by Julian

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