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Things Economists Might Want To Stay Away From, Music Edition…

April 10th, 2009 · 5 Comments
Behavioral Econ · Happiness · Music Biz

Let’s see, things that economists should stay away from…bears (bears are SO on notice), the sun (I doubt all that being inside running regressions does wonders for anyone’s base tan), Rush Limbaugh, the banking industry, apparently…and the arts?

Maybe. Just go with me here…so economic models for consumer choice hinge on the notion of utility maximization- in other words, in an economist’s world you can represent items in terms of their inherent utility (or usefulness) and then make choices that maximize that level of utility. This all seems perfectly reasonable, but how do consumers determine that inherent level of utility? (Note: economists don’t claim that people explicitly go through this process when deciding what to consume, just that their actions are consistent with such a process.) Well, one option would be to make a pro/con list, or to just ask yourself “What makes me like this and how much?” The problem is that when you apply such a process to some types of choices, you can get suboptimal results.

An example, from Gut Feelings: The Intelligence of the Unconscious by Gerd Gigerenzer: Social psychologist Timothy Wilson and his colleagues once offered posters to two groups of women as a thank you present for participating in an experiment. (The posters were actually part of the experiment, but the subjects weren’t supposed to know that.) In one group, each woman simply picked her favorite poster out of a selection of five; in a second group, each was asked to describe her reasons for liking or disliking each poster before choosing one. Interestingly, the two groups tended to take different posters home. Four weeks later, they were all asked how much they enjoyed their present. Those who had given reasons were less satisfied and regretted their choice more than those who had not given any.

(In case you’re curious, the author above does behavioral research that feeds into Malcolm Gladwell’s Blink)

So what happened? In psychological terms, the experiment demonstrates the difference between affect and cognition. “Affect” basically refers to your gut, or visceral, reaction, and “cognition” is, well, analytical thinking. When asked to give reasons for a choice, the affective response is stifled in favor of the cognitive response. However, it is the affective response that comes into play when you actually look at the poster in your apartment. Therefore, when you don’t go with the affective response to choose a poster in the first place, you get bad choices.

So where does this affective response matter for enjoyment of a product? Roughly speaking, it is relevant for the class of products under the heading of what I will technically call “artsy-fartsy”- posters, paintings, TV programs perhaps…and music.

Now enter the universe of web sites that aim to organize the world of independent music by getting listeners to rate and/or review music so that the “best” can rise up to the top and get noticed. As examples, I bring you:

(If you know of others that I haven’t listed, it would be awesome if you could comment and let me know.)

The important distinction between the first site and the other two is that GarageBand requires listeners to write a text review in addition to answering other qualitative questions and giving a 1-5 star rating, whereas Stereofame and OurStage use simpler systems that just ask listeners to give a thumbs up or thumbs down or rank sets of songs. Given what we’ve learned so far, which system is going to lead to the most commercially-viable music getting recognized? Which one would you want to use to find new music to listen to?

That said, I do the marketing for a Boston-based band, and we’ll take whatever awards GarageBand wants to give us. 🙂

As a follow-up question, how do you feel about TV and movie focus groups in light of what you’ve just read?

Tags: Behavioral Econ · Happiness · Music Biz

5 responses so far ↓

  • 1 Ken Underwood // Apr 10, 2009 at 1:49 pm

    I’m a big believer in BLINK. That’s why we don’t ask for a rating at Stereofame…I don’t want listeners to over analyze the song…just tell the artists and Stereofamers whether you it or not. We do have an artist of the month contest which does require detailed analysis/review by the listener. So far, it’s yield great results as well. But I think most SF listeners could tell you who the finalists will be each month just from their gut. Great article!

  • 2 The PULSE Review // Apr 10, 2009 at 2:01 pm

    I read “Blink” mostly because I was such a huge fan of “The Tipping Point”, but I generally didn’t find it to be as compelling.

    Personally, I enjoyed “Think!”, by Michael LeGault mostly because I think (ha) that people in general make way too many decisions without applying any base level of critical thinking. They’re too busy thin slicing to think about being a teen mom, or how much credit card debt they can handle, it seems.

  • 3 Brian Bourke // Apr 10, 2009 at 5:49 pm

    I just love the democratization of the process by which the public “discovers” music. It’s freeing the market by breaking up oligarchies, isn’t it? Trent Reznor: “When we found out we’d been released (from their recording contract) it was like, ‘Thank God!’. But 20 minutes later it was, ‘Uh-oh, now what are we going to do?’ It was incredibly liberating, and it was terrifying.”

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  • 5 Valentine Joseph // Jan 8, 2010 at 2:12 pm

    As a fan of electronic music, which is pretty much a niche market, we have developed quite an interesting system where producers and djs are able to connect with their fans and where fans are able to review and rate the artists. You should check Soundcloud and LastFm for example of such

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