Given his role as a teacher of marketing and advertising, I’m not surprised that David Dunne disagrees with my book No One Makes You Shop at Wal-Mart, but I am disappointed that he gets the idea at the heart of the book wrong.
My central claim is that our faith in consumer sovereignty is misplaced—not because we are tricked into making bad choices, but because even good individual choices can lead to bad results. I use game theory to explore this paradox because it’s the most precise framework we have for thinking about choices and their consequences.
So when Dunne claims that “for Slee … game theoretic scenarios … demonstrate that people, acting individually and rationally, make bad choices” (my emphasis) he is getting it backwards. Game theory demonstrates that bad things can happen to good choices. The difference matters because it allows for a discussion based on the respectful assumption that people make the best of their circumstances.
Here’s a simple example. Imagine you are sitting in the crowd at a packed sports stadium and you want a better view of the game. The sensible thing to do is to stand up. But as others around you do the sensible thing and stand up as well, everyone’s better view is eroded until you are no better off than when everyone was sitting down. Was your decision to stand up a “bad choice”? Clearly not: by sitting down you would see even less. Yet does the outcome reflect your preference? Not if what you prefer is a better view.
It’s a trivial example, but this kind of trap appears in more important places too. Pollution, urban sprawl, employment discrimination, credit rationing and overwork are among the examples I discuss. To escape, we need to change the rules of the game; to open up additional options not easily available to us as consumers, such as the ability to act together.
Faith in consumer sovereignty would have us believe we’ve voted with our feet for any outcome the market provides—that if we valued our downtowns we would not shop at Wal-Mart and if we cared about sweatshops we would not buy the clothes made there. But, as I hope the book shows, things are just not that simple.
