As a child I felt a very strong need to be unique. I desperately needed to possess likes and ambitions that were distinct from other children in my age group and therefore the views expressed by others dramatically affected the way that I approached the world.
I remember one day from my youth – I was probably four – when my brother brought home a green toy car from school. I first saw it in my brother’s hand when he was walking through the front hall – I was rapt in jealousy over this new toy. The green plastic was just translucent enough so you could see the light dance through it. Mmm! – That was a good-looking toy.
I wanted one. Using all the articulation I could muster I asked my parents if I could have one as well. To my delight, my parents said I could. They also said that my brother got a green one because green was his favorite color and they would get any color for me that I chose. Then they asked me the hard question: what was my favorite color?
When I heard this question, I immediately stalled. The truth of the matter is that my favorite color was green, just like my brother. And not just any shade of green either, my favorite color was the exact shade of green of my brother’s toy. I distinctly remember feeling a deep emotional connection with that shade of green and yet I stood there thinking over the question, thoughts racing through my immature brain. After a few minutes of thinking, I stood up straight and stated assertively that my favorite color was yellow.
Yellow? What four-year-old boy says their favorite color is yellow? And truthfully, I didn’t even really like the color yellow; I just desperately needed to be unique from my brother who had already declared that his favorite color was green. I acted irrationally, lied, and ended up with a yellow toy just because I was terribly afraid of being like everyone else.
Although it’s probably a little better disguised, I think that the need to be unique exists in the grown-up world as well. Specifically I believe it is one of the main drivers behind the law of market duality.
The law of market duality is the notion that in the long run, every market will become dominated by two players. Think – Coke vs. Pepsi, or PC’s vs. Mac’s, or Lowes vs. Home Depot. From an economic perspective, I’m sure there are many reasons for this principle to exist, however from a purely behavioral perspective I think the need to be unique drives people to always support at least two viable alternatives in each market. If there were only one choice, there would be no way to differentiate your friends, coworkers, or peer companies (or even your brother). I believe that sometimes people will actually opt for a sub-optimal choice, just so they can be unique individuals.
Much of what I learn about human behavior, I learn from myself as a child. By studying the times when I acted irrationally for seemingly no reason, I learn a little bit more about the way people make decisions. I find that it’s a great way to learn about behavioral economics because I remember the way I felt when I made each irrational decision. From a purely statistical perspective, this probably isn’t a great way to draw conclusions, but the data is inexpensive and easy to access. Also, seeing my childhood neuroses manifest themselves as broad trends in the business world actually makes me feel a little better about myself. I guess I wasn’t so weird after all.