The Paradox of Choice and Variety

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Many apparent paradoxes of consumer behavior are best explained by similar mental mechanisms. In a non-agotic environment, two or three bad outcomes in a row lead significantly worse than spaced misfortune. We use brands very heavily as a form of variance reduction in making purchases. But what I think we are paying a premium for is the fairly reliable certainty that however good it turns out to be, it won't be dreadful.

Author and Advertising Executive Rory Sutherland of Ogilvy talks about his book Alchemy with EconTalk host Russ Roberts. Sutherland makes the case for the magic (yes, magic!) of advertising and branding in helping markets work well. This is a wide-ranging conversation on consumer choice, public policy, travel, real estate, and corporate decision-making using insights from behavioral economics and decades of experience in the world of advertising.