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

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. 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.

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

Geoffrey Miller’s “Spent”: an evolutionary psychology romp through marketing and consumerism

I've repeatedly written about Geoffrey Miller based on the many provocative ideas presented in his earlier book, The Mating Mind. (e.g., see my earlier post, "Killer High Heels"). A gifted and entertaining writer, Miller is also an evolutionary psychologist. His forte is hauling his scientific theories out into the real world in order to persuade us that we didn't really understand some of the things that seemed most familiar to us. In his new book, Spent, Miller asks why we continuously buy all that stuff that we don't really need? Miller's answer is twofold. Yes, human animals have been physically and psychologically honed over the eons this to crave certain types of things over others to further their chances at survival and reproduction. That's only half the answer, however. We must also consider "marketing," which is

The most important invention of the past two millennia because it is the only revolution that has ever succeeded in bringing real economic power to the people. . . . it is the power to make our means of production transform the natural world into a playground for human passions.

Is the modern version of marketing a good thing or a bad thing? The answer is yes.

On the upside it promises a golden age in which social institutions and markets are systematically organized on the basis of strong purple research to maximize human happiness. What science did for perception, marketing promises to do for production: it tests intuition and insight against empirical fact area market research uses mostly the same empirical tools as experimental psychology, but with larger research budgets, better-defined questions, more representative samples of people, and more social impact.

Here is a July 2009 interview of Geoffrey Miller by Geraldyne Doogue of the Australian Broadcast Network: Most of us are quite familiar with the downside of marketing. It encourages us to buy things we don't really need. But marketing doesn't merely clutter up our houses and garages; it corrupts our souls:

Continue ReadingGeoffrey Miller’s “Spent”: an evolutionary psychology romp through marketing and consumerism

Good enough is good enough

I’m enjoying my newly and consciously chosen path: things don’t need to be perfect. Not that I ever really was a perfectionist. But especially when it comes to consumer purchases, I’m much less a perfectionist than I ever was. Here are a couple cases in point. The rear (electric) window of our ten year old car no longer goes up and down. My immediate thought was to have it fixed. I got an estimate: $270. Gad. My wife and I decided that we can do without that window going up and down (even though my daughters (who sit in the back) would prefer that it work. $270 is a lot of allowance money. I asked the repair guy how much it would cost to make the window permanently stay up (because it kept sliding down). He said that he could do it for $100. I turned down that offer, went home and glued it shut. Far from perfect, though quite satisfactory. A friend visited today. The lock on her car’s passenger-side door was broken. She said: “Passengers can get into the car on the other side.” She added that not fixing minor things is a big time saver. Why make appointments and burn hours fixing something that isn’t really a priority? These car stories won’t resonate for may people. I’ve known dozens of people who freak out if there is even a single little scratch on their car. Nor would they ever try to fix it themselves. They will run it to the dealer, especially if someone else was at fault. A man accidentally collided with our other car 6 months ago. I suggested that I find a body shop that could bang it into shape, but said that I didn’t want it to be “like new.” After all, the car is 8 years old. I found a shop that straightened out the bends and sprayed over the scrapes for $400, instead of getting a “like new” job that would have cost $1,500. It’s good enough for me. There are days when I intend to get x number of things done. I’ve found that my life goes much more smoothly if I let some of those things drop off the list, unaccomplished.

Continue ReadingGood enough is good enough

The danger of Cheap and Plentiful

At Salon.com, Stephanie Zacharek explains that cheap and plentiful goods are not a good idea. Her article is a review of a new book, "Cheap: The High Cost of Discount Culture," by Ellen Ruppel Shell. Here's how Zacharek's bottom line regarding Shell's book:

The wealth of cheap goods available to us doesn't make our lives better; instead, it fosters an environment that endangers not just the jobs of American workers but the idea of human labor, period.

It turns out that Shell is not only picking on Wal-Mart. She's talking about those mass-farmed shrimp, as well as trendy stores like IKEA. "We no longer expect craftsmanship in everyday objects; maybe we don't feel we even deserve it."

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Ripped off? Go get an attorney! But wait . . . you won’t find one.

Think of all the times that merchants have ripped people off. Sometimes it’s a line-item that jacked up your bill. You called and complained, but you eventually gave up and ate the $3.50 after making four phone calls without satisfaction. Sometimes, you bought an appliance and after getting home discovered that it wasn’t as it was promised, but the merchant refused to take it back. Or it might be a $1,000 piece of electronics. Only after the warranty expired, it became clear that it didn’t function as promised. Maybe it’s a used car that you bought for $2,500 and right after driving it off the lot you discovered that it literally wouldn’t go, certainly not at highway speeds, and that the dealer knew of the problem but refused to refund your money. Consider the many complicated financial transactions you’ve signed, credit cards, car loans, or payday loans. What do you do if you notice you’ve been ripped off, but the amount of damages you’ve suffered is relatively small, less than $3,000? You go get an attorney, right? Wrong. You won’t find an attorney to handle cases in this range unless an attorney decides to help you as a favor or “pro bono.” Why not? Because it is a time-consuming task to open a case, file it, prepare for trial and represent a consumer in a trial. It can take dozens of hours to get a decision in the trial court, and then the defendant, who is often represented by a high-priced attorney, can appeal the case, delaying the result for another year. The net result is that consumers who have been ripped off for less than $3,000 (and, actually, much greater amounts too) will have only one real option to litigate their claim: at the small claims court where they will represent themselves.

Continue ReadingRipped off? Go get an attorney! But wait . . . you won’t find one.