My teenage daughter used to ask me whether I ‘hated’ the male lead singer of the band The Beautiful South every time one of their ditties was played on the radio. It is true, there are some singers whose tones are anything but dulcet to my ears, and Paul Heaton is one of them, along with R.E.M.’s Michael Stipe, The Kooks’ Luke Pritchard, and Florence Welch of the band Florence+The Machine. These are all, no doubt, fine vocalists, and the problem is surely situated entirely in my own auditive system.
But I do, of course, not remotely hate them, not even their voice. If I really did, hearing a song by these artists would probably make me throw the radio out, or at the very least make me change the station. Instead, I am pretty much indifferent — in an economic sense, that is.
Indifference is one of these words that have a slightly different meaning when they’re used by economists. Imagine you are standing in front of a shop window, looking at a pair of trainers you would like to buy priced at, say, £50. But price-sensitive as you are, you whip out your phone and you check the prices nearby. And what do you know, about two miles away, identical trainers are for sale for £45. Would you make a detour of a good half hour to save a fiver? Probably not. If the other shop was just two doors down, however, my guess is that you’d make the tiny effort to buy them there.
On the curve
Somewhere between two miles away and two doors down is the point where you would be indifferent — you would not have a preference either way. In economics, the varying quantities of two (or more) goods in a bundle that provide the same utility is plotted as a so-called indifference curve. The figure on the left below shows that, for a particular person, a bundle of 4 biscuits and 2 apples, and one of 1 biscuit and 6 apples gives them equal satisfaction. We can do the same for the price of the trainers and the distance walked (on the right). This shows that walking a little less than half a mile for trainers that are £5 cheaper represents the same utility to us as buying them right here at the full price, as would all the other points on the curve — for example, you’d be just as willing to walk two miles if you got a £15 discount.
For economists, this curve is infinitely thin. If the trainers were £35.01 in the shop two miles away, you’d definitely stay here. If they were £34.99, you’d definitely walk the two miles. For real people, it is not quite like that though. We don’t normally think in such black-and-white terms, and so there is typically a range across which we would be indifferent. The one day we may be inclined to walk two miles for a pair of trainers even if they’re only £10 cheaper than those right here, and the other day we may buy them right where we are, even though we can get them for £20 less two miles further.
But is this necessarily a sign of indifference? One way to find out is to look back. The day after you bought the more expensive shoes, do you feel regret you didn’t, after all, go the extra distance to get them cheaper? If so, you are not being indifferent. Instead, you just have fluctuating, noisy preferences, with an indifference curve that moves around — one day here, the other day there.
And that is a recipe for frequent disappointment, dissatisfaction and stress. Even though the choices you face are rarely about buying the same item for a different price at different locations, any choice risks putting you in this predicament. You can experience it after the event — yesterday you were sure this T-shirt was really much better than that other one, but today you believe you made the wrong call. And you can experience as indecision while you are making up your mind what to buy: will you have a bacon sandwich for lunch, or a prawn one? Both situations are symptoms of the same problem.
Indifference with good credentials
Conventional decision approaches won’t help you here. If you are so anxious about making the right decision and avoiding subsequent regret, a thorough cost-benefit analysis is the last thing you need. It will promptly give you what is sometimes called analysis paralysis There are umpteen factors you could take into account — how long ago since you had a bacon sandwich? How many calories do they each have? What are you having for dinner this evening? Do they cost the same? Before you know it, lunch time is over and you still won’t have made up your mind.
The underlying problem is in how important you think your choice is. The more you feel that your eventual choice really, really matters, the closer you are to the teenager for whom emotions tend only to occur in a totally saturated condition: no such thing as mild dislike, only profound hate.
The kind of indifference that can help us avoid the emotional distress of having to make the right choice, or facing regret for making the wrong choice has pretty good credentials. It is rooted in equanimity, an attitude that also has a prominent place in Stoicism and Buddhism. Yes, the bacon sandwich could give you just a little more pleasure than the prawn one, but does it really matter that much? You could have saved £10 on the trainers by going out of your way, but is the money worth that much, especially considering you got home half an hour earlier?
There is even a (behavioural) economics concept that captures the spirit: satisficing, a term coined by the great economist and polymath Herbert Simon more than 60 years ago. It is a fusion of satisfying and sufficing — alluding to the act of being happy with an alternative that is good enough, instead of seeking out the optimum (which is termed maximizing). It’s almost like being a bit more — not in a bored way, but in an “it’s fine either way” sense.
Choosing between alternatives can be hard, because there are so many different facets that seem to matter. For some of those, one of the alternatives wins out, for others the other one (and it gets much worse if you have more than two options). Figuring out which ones truly matter can be hard too. But what is easy, is to imagine all but one of the options away — imagine there was no choice. Would you be happy with the remaining one? If not — discard it, there’ll be a better one among the ones you’ve ignored just now. But if you would be quite content with it, go for it and move on. It is good enough, and you have just satisficed yourself.
Being more indifferent brings another advantage. Sometimes the problem of choice is not about figuring out what we really want, but choosing between our preference and that of another person — our spouse or partner, or a friend, say. They want to have a Thai takeaway, and we prefer Chinese. You got it: imagine the Chinese is closed — would you be satisficed by Thai food? Bravo, you have made indifference work for you.
Indifference is being happy enough with several alternatives, and that can make you happier overall.
(I would have said I hope that this post doesn’t leave you indifferent, but actually, it’s fine either way.)
Originally published at http://koenfucius.wordpress.com on May 3, 2019.