Quote from Things Seen and Unseen: Toothpaste and the paradox of choice
Posted: September 4th, 2009 | Author: vlad | Filed under: Quote |Coleman’s mustard made their money from the mustard that stayed on the plate, not the mustard you put on your meat
Things Seen and Unseen: Toothpaste and the paradox of choice
This is an astute metaphor for a lot of other things. The selling party needs to either sell more "stuff" or increase the margin on the existing stuff they sell. Sometimes the first option is easier because the buyer gets a sense of getting value for their money, even if the stuff bought ends up being wasted.
There must be some economic theory that explains and rationalizes this.
Quite the contrary. Classic microeconomic theory runs on the assumption that individuals are rational, and try as hard as they can to maximize their ‘utility’ under a budget constraint. Buying more than what is actually required only breaks the lemma thus cannot be justified by economic theory. This paradox is more psychological than anything else; we like having fresh, new things.