Two things from last week:
- The opening of the new Makro in Brakpan; and
- The opening of the new Starbucks in Rosebank.
Scenes from the new Makro Brakpan parking lot:
Admittedly, there were some good tech deals available for the first 100 or so customers:
But most of those customers would have been in that queue far behind the point at which the good deals would all have been gone.
People queueing from midnight.
What is this madness?
I mean, I can almost understand queueing for over 24 hours to buy a heavily-discounted Macbook Air. But missing a night’s sleep to stand outside a new Starbucks for a distinctly over-sweet “Iced Sparking Mint Espresso” – just to be the first to have one on South African soil – seems like a poor use of one’s time.
It reminds me of this section in Richard Thaler’s book “Misbehaving: The Making of Behavioural Economics”:
Linnea is shopping for a clock radio. She finds a model she likes at what her research has suggested is a good price, $45. As she is about to buy it, the clerk at the store mentions that the same radio is on sale for $35 at new branch of the store, ten minutes away, that is holding a grand opening sale. Does she drive to the other store to make the purchase?
On a separate shopping trip, Linnea is shopping for a television set and finds one at the good price of $495. Again the clerk informs her that the same model is on sale at another store ten minutes away for $485. Same question… but likely different answer.
Excerpt From: Richard H. Thaler. “Misbehaving: The Making of Behavioral Economics.” W. W. Norton & Company, 2015-05-10T22:00:00+00:00. iBooks.
It really calls everything into question, doesn’t it?
One minute, you’re coasting along, thinking that everyone is fairly rational and mostly consistent and trying to make the best decision within their realm of knowledge.
Next minute, you’re caught in a traffic jam outside a Makro in Brakpan, where thousands of people are standing in line for hours on end in the hope that they might get to take advantage of a tech special that will have disappeared long before they even enter the store.
It really makes you question whether economists have a firm enough grasp of the macroeconomic picture. Because it’s scenes like this that should get us a little concerned about that “we’re all just rational individuals making rational choices, and the economy is just the cumulative sum of those choices” way of thinking.
I mean: perhaps the crowd is its own kind of thinking beast?
Rolling Alpha posts about finance, economics, and sometimes stuff that is only quite loosely related. Follow me on Twitter @RollingAlpha, or like my page on Facebook at www.facebook.com/rollingalpha. Or both.
Kosta April 26, 2016 at 09:18
“I mean: perhaps the crowd is its own kind of thinking beast?”
Jayson! This has been my central gripe with (my admittedly limited exposure to) Economics studies! The broad-sweeping assumptions of “all things being equal” and that “consumers are rational”.
A fascinating read on the topic is Gustave Le Bon’s magnum opus “The Crowd: A Study of the Popular Mind”.
Also #makroeconomics killed me.Reply