George Akerlof and Robert Shiller have good points, excellent stories, and a clear aim in Phishing for Phools. The aim is to convince economist colleagues that all market outcomes aren’t perfect. I applaud their aim. That said, their conceptualization assumes consumers (and others) are robots with a monkey on our backs. The monkey prevents us from being “fully rational”. I’d say, however, that we are the monkey. I was left with the feeling that even the best economists don’t get marketing.
The Robot And Monkey Are One Creature
I disagree. Instead, I think it is a bit too crude to think of decision making as a “fully rational” robot being put off by a monkey. If you do you might describe appeals to the monkey as phishing (manipulation and deception). The view of humans isn’t well developed though. Why do economic robots want anything at all? In politics why would a robot care who won the election. If a robot doesn’t really care about anything what does it mean to trick them? We are both the monkey and the robot.
You can better design products to make them appeal more to the consumer. This doesn’t seem to the “phishing” that the book envisages. Still it seems to be lumped in with it in their conception. Yes, the smells that radiate from Cinnabon stores influence weak-willed consumers to buy food that they don’t need to consume. Still who “needs” Cinnabon? Our monkeys enjoy Cinnabon but would the world be a better place if all stores had no smells? The smells, after all, add to the enjoyment of those eating there. The smells both improve the product and tempt the weak willed. This means that smells aren’t really conclusive evidence that any consumers are being tricked.
Marketing Is Not Just Advertising
(The authors also conflate marketing and advertising which is unfortunate. See the “Evolution of Marketing” on page 54, Akerlof and Shiller, 2015).
What Sort Of Phool Am I?
They describe voters in two camps. Firstly, they point to “informational phools”. These are the not fully informed. (I guess that is everyone). They also note “psychological phools”. These are people who respond differently to different messaging, (Akerlof and Shiller, 20915, page 75). They are surely right to note both of these happen. That said, most non-economists already believe that voters aren’t perfect decision-makers. As such, it would be great to address a bit more just how “phoolish” voters are.
Even The Best Economists Don’t Get Marketing
This book seems to have been written mainly to influence economists that behavioral effects matter. Let’s hope it works. In that sense it is useful even if marketers might feel that even the best economists don’t get marketing.
For more on rationality see here.
Read: George A. Akerlof and Robert J. Shiller, (2015) Phishing for Phools: The Economics of Manipulation and Deception, Princeton University Press.