Optimally Suboptimal: Behavioral-Economic Product Features

14 Dec

Booking travel online feels like shopping in an Indian bazaar: a deluge of options, no credible information, aggressive hawkers (“recommendations” and “targeted ads”), and hours of frantic search that ends with purchasing something more out of exhaustion than conviction. Online travel booking is not unique in offering this miserable experience. Buying on Amazon feels like a similar sand trap. But why is that? Poor product management? A more provocative but perhaps more accurate answer is that the product experience, largely unchanged or becoming worse in the case of Amazon, is “optimal.” Many people enjoy the “hunt.” They love spending hours on end looking for a deal, comparing features, and collecting and interpreting wisps of information. To satiate this need, the “optimal” UI for a market may well be what you see on Amazon or travel booking sites. The lack of trustworthy information is a feature, not a bug.

The point applies more broadly. A range of products have features that have no other purpose than gaming behavioral concerns. Remember the spinning wheel on your tax preparation software as the software looks for all the opportunities to save you money? That travesty is in the service of convincing users that the software is ‘working hard.’ Take another example. Many cake mixes sold today require you to add an egg. That ruse was invented to give housewives (primarily the ones who were cooking say 50 years ago) the feeling that they were cooking. One more. The permanent “sales” at Macy’s and at your local grocery store mean that everyone walks out feeling like a winner. And that means a greater likelihood of you coming back again.

p.s. When the users don’t trust the website, the utility of recommendations in improving consumer surplus ~ 0 among sophisticated users.

Related: https://gojiberries.io/2023/09/09/not-recommended-why-current-content-recommendation-systems-fail-us/