Sunday, January 01, 2006

The Best Argument Yet

...against advocates of the idea of "choice paralysis" (from Julian Sanchez at the Daily Dish):
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.
Really, just the standard argument against monopoly power.


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