Fat Tire’s first prize: an obsolete bike. The rationality of costly signaling.

July 20, 2009 | By | 30 Replies More

Fat Tire Beer is holding a contest, and first prize is an old-fashioned bicycle. It is a cumbersome and heavy one-speed bike that lacks most of the useful features found on modern bicycles. What does it have going for it? Nothing much worth my while. I buy my bicycles for performance, features and functionality, not looks.

Image by Erich Vieth

Image by Erich Vieth

Others would say that the Fat Tire bicycle has an unique style worth coveting. I know a woman who recently paid a large amount of money for a “retro” bicycle much like the one in the photo. She bragged about her bicycle only in terms of what it looked like, and seemed to get irritated when I asked her whether she would miss some of the useful features found in most modern bicycles, features such as multiple gears, high-tech gear-shifting, feather-light frame, and front or rear suspension. It appears that Fat Tire Beer is looking for customers like the woman I just described, people who are obsessed with the looks of a bicycle rather than its functionality.

I recently posted on Geoffrey Miller’s terrific new book, Spent. At page 97, Miller discusses the “signaling value” of many modern products. Miller points out that modern corporations work hard to avoid competition based upon objective features that can be compared. Fat Tire Beer, for example, did not choose to offer a modern bicycle that could easily be compared to the many other bicycles currently being sold. Instead, the company chose to offer an old-fashioned bike that would signal a certain trait for the owner and his/her friends/acquaintances. Modern corporations

Use advertising to create signaling systems–psychological links between brands and the aspirational traits that consumers would like to display. Although these signaling links must be commonly understood by the consumer’s socially relevant peer group, they need not involve the actual product at all. The typical Vogue magazine ad shows just two things: a brand name and an attractive person . . . there is a hidden rationality at work–the rationality of costly signaling. What matters in most advertising is the learned association between the consumer’s aspirational traits and the company’s trademarked brand name–the fountainhead of all profitability.

Therefore, don’t waste your time trying to figure out what obsolete styles of bicycles have to do with beer. The bicycle featured on the label of Fat Tire Beer has nothing to do with the taste or quality of the liquid in the bottle. Rather, buying Fat Tire Beer is an opportunity for a consumer to display to others that the consumer can afford a premium beer. The bicycle on the label gives consumers a further opportunity to suggest that tradition is more important than functionality. Those who buy Fat Tire Beer let the beer do their talking for them: “I’m a person who values tradition over functionality.” That’s my guess.

I wouldn’t accept that cumbersome and sparsely-featured contest bicycle even if someone offered it to me for free, because I know less-costly, less wasteful and more effective ways of convincing others that I often value tradition. It involves hard work and no gimmicks. It requires that you willingly put your life under a microscope, that you repeatedly show rather than tell, and that you show your values in ways other than through conspicuous consumption.


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Category: advertising, American Culture, Communication, Consumerism, Current Events, Media, Psychology Cognition, Science

About the Author ()

Erich Vieth is an attorney focusing on consumer law litigation and appellate practice. He is also a working musician and a writer, having founded Dangerous Intersection in 2006. Erich lives in the Shaw Neighborhood of St. Louis, Missouri, where he lives half-time with his two extraordinary daughters.

Comments (30)

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  1. Tom says:

    I just bought the 20th anniversary bike on craigslist and it is a sweet ride! I compete in triathlons and I love my Cannondale multi-geared, tiny tired speed machine. Going really fast is a great time, but slowing it down and cruising is fun too. This bike is comfortable, fun, gorgeous, and to be honest a pain to get up hills. the enormous tires make it far from agile, but really, really comfortable. I used to commute with a 70 lbs 1970 something single speed bike when I started riding bikes, it wasn’t most the most pragmatic ride but I only had about 5 miles to commute and I loved the bike. To each his own I suppose, but I enjoy the simplicity of single speed bikes just as much as the utility and speed of geared bikes.

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