I take your point about some whisky being orders of magnitude more time-consuming & expensive to produce, but that's part of my point.
Some products may advertise being "handmade!", and it takes 10x more time & effort to make them, but a machine actually does a better job of producing that product. People will still often pay more for the handmade product if that characteristic is used as a selling point, because brand recognition and perceived value are examples of how the human brain is easily hacked. People have clustered together notions of "quality" with the concept of "handmade" and reality is hard-pressed to convince them otherwise.
From the essay:
Or consider the famous Pepsi Challenge: Pepsi asked consumers to blind-taste-test Pepsi vs. Coke; most preferred Pepsi. But Coke maintains its high market share partly because when people are asked to nonblindly taste Coke and Pepsi (as they always do in the real world) people prefer Coke. Think of it as the brain combining two sources of input to make a final taste perception: the actual taste of the two sodas and a preconceived notion (probably based on great marketing) that Coke should taste better.
This is truly remarkable data. People come to expect Product A is better than Product B, and that expectation drives their experience...even when they actually think Product B is better when branding is not available.
On signaling: I'd say it's much more influential than we realize. Further, there is a sort of "self-signaling" at play. It's a deeper discussion, but I believe people's choices are a part of a narrative they are telling about themselves, and it contributes to their experienced happiness/satisfaction (Kahneman) as they traverse life. We all want to be the kind of character in the story who "appreciates good whisky" and "spends more for quality." We don't want to be the guy who has undiscriminating tastes.
Which is also a bit of a hoax/mirage. We know why Pepsi wins the Pepsi challenge: More Sweetness, less acidity. Those things also make Pepsi lose the Pepsi challenge if consumers are asked to grade drinking an entire can, particularly if it gets diluted by ice or gets slightly warmed over the course of drinking the can.
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Notes -
I take your point about some whisky being orders of magnitude more time-consuming & expensive to produce, but that's part of my point.
Some products may advertise being "handmade!", and it takes 10x more time & effort to make them, but a machine actually does a better job of producing that product. People will still often pay more for the handmade product if that characteristic is used as a selling point, because brand recognition and perceived value are examples of how the human brain is easily hacked. People have clustered together notions of "quality" with the concept of "handmade" and reality is hard-pressed to convince them otherwise.
From the essay:
This is truly remarkable data. People come to expect Product A is better than Product B, and that expectation drives their experience...even when they actually think Product B is better when branding is not available.
On signaling: I'd say it's much more influential than we realize. Further, there is a sort of "self-signaling" at play. It's a deeper discussion, but I believe people's choices are a part of a narrative they are telling about themselves, and it contributes to their experienced happiness/satisfaction (Kahneman) as they traverse life. We all want to be the kind of character in the story who "appreciates good whisky" and "spends more for quality." We don't want to be the guy who has undiscriminating tastes.
Which is also a bit of a hoax/mirage. We know why Pepsi wins the Pepsi challenge: More Sweetness, less acidity. Those things also make Pepsi lose the Pepsi challenge if consumers are asked to grade drinking an entire can, particularly if it gets diluted by ice or gets slightly warmed over the course of drinking the can.
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