I've been reading a lot of "pop economics" books in the past ten months or so—you know, things like Freakonomics by Steven D. Levitt and Stephen J. Dubner, Alain de Botton's excellent Status Anxiety, and The End of Poverty by Jeffrey Sachs, who was on "The Daily Show" the other night. Anyway, the one I've been reading most recently is Predictably Irrational: The Hidden Forces That Shape Our Decisions, by Dan Ariely. I wish I could reconstruct for you the path I took to find it—it started with a link recommendation from Adam McAnaney—but I'm afraid I don't recall the sequence of events. I found it in the business section, no less, a part of the bookstore where I seldom venture.
Anyway, the book, which is even lighter and easier to read than most pop econ books, has a simple thesis that is entirely contained in the title. The idea is that even though classical economics predicts that people in their roles as agents in the economy will perform as "rational actors," in fact people not only act irrationally, but do so in highly predictable ways. The book's ideas probably aren't particularly revolutionary, and the "experiments" set up by the author (a professor) and his professor friends are sometimes so simple that they resemble play, at least in the simplified accounts of them he gives here. Presumably he writes them up more rigorously for more scholarly publications.
I'll give you just one example of the experiments. Passing students are offered a choice between an expensive chocolate, a Lindt truffle, for the reduced price of 15¢, and a common chocolate, a Hershey's kiss, for 1¢. Since the Lindt truffle ordinarily costs much more than 15¢, a solid majority choose that option. But when the price of each option is reduced by the same amount, one cent—the Lindt truffle then going for 14¢ and the Hershey's kiss for free—suddenly the response changes dramatically, and most people choose the free Hershey's kiss. This is one of many experiments offered to prove that people find "something for nothing" to be irresistible, even when it might not be technically their best option.
To make a long story short, I've found that a lot of the ideas in the book have a direct relevance to how camera purchasers behave. In one fascinating section, Professor Ariely first demonstrates the persuasiveness of the "herding instinct," noting that people are experimentally more likely to want to join a longer line to get something than a shorter one, but then he goes on to claim that brand loyalty is in a sense "herding" with yourself. That is, you buy one Canon camera, then you buy another, and another, and another, and, since you've bought Canons in the past, you're much more likely to buy one in the future. You're in effect "lining up behind yourself" to buy a Canon—same old herding instinct, it's just that your past selves are the other members of the herd. Hmm. Very interesting.
In the part of the book I'm reading now (Chapter 8, "Keeping Doors Open: Why Options Distract Us from Our Main Objective"), he actually uses cameras as an example, to make a point I've made myself in the past. My formulation of the idea is that the less difference there is between two cameras, the less it matters which one you choose. Thus my standard answer to the inevitable XTi vs. D40 (now XSi vs. D60) question. When people ask me whether they should get the entry-level Canon or the entry-level Nikon, my answer is "Yes, you should."
Although that's seen as, um, unhelpful, it's actually a considered answer: what I mean is that you should stop worrying about the choice, buy one, and get on with taking pictures. It doesn't matter which one you choose. They're both excellent cameras, and you'll get accustomed to either one after you use it for a while.
Faced with two similar options, a quick decision would be best. However, it turns out that we (irrationally) experience options not chosen as losses, and human being are very averse to loss. "In fact," says Prof. Ariely, "choosing between two things that are similarly attractive is one of the most difficult decisions we can make. This is a situation not just of keeping options open for too long, but of being indecisive to the point of paying for our indecision in the end." That helps explain why people are so fanatical about inconsequential aspects of camera-buying decisions.
Interesting stuff. And as the author notes at the end of the chapter, even when one is aware of the irrationality of indecision, it doesn't tend to help us make our own decisions any faster or more easily. To which I can only say: amen, brother.
Mike (Thanks to Adam)