Why Stories Sell and How They Spread
Stories sell, because they appeal to our most fundamental reasoning instincts. Robert Shiller shows how some stories go viral and shape our buying preferences.
We understand what we want to buy, but we’re often unaware of why we want the things we do. Robert Shiller provides insight into the stories that drive the “why” behind our desires.
For example, during the Great Depression, many people had been laid off and were struggling to thrive in the United States. Grand displays of wealth repulsed the many people who were struggling to make ends meet.
The Great Depression also had a jigsaw puzzle craze. Shiller explains:
“To occupy themselves, during a quiet, stay-at-home evening, some people bought one of the new cheap cardboard jigsaw puzzles (instead of the more expensive traditional wooden puzzles) at newsstands with the evening newspaper on their way home from work. Jigsaw puzzles were suddenly on sale everywhere, and people wondered, ‘What psychological quirk lies buried in the human brain to spring to radiant life at the rattle of odd pieces of material in a cardboard box?’”
This was part of a larger story that people told themselves about what it was like to be in poverty. The unemployment rate peaked at 24.9% during the Great Depression. Many had lost their life savings along with their jobs, making people who were managing to survive in poverty objects of admiration.
Contrast that with attitudes today, in which home ownership is seen as a crucial part of the American Dream. Buying more luxury products, avoiding the appearance of poverty, and being able to own a home are now seen as the American Dream’s fulfillment.
The power of narrative and the overlapping stories that reinforce each other explain how the things we value can change so dramatically.
Narrative Constellations and Going Viral
When stories become widespread, they become influential. That means it not only has to go viral, but it also has to be part of a group of self-reinforcing stories.
Stories go viral the same way that diseases do. Shiller writes that “the contagion rate must exceed the recovery rate for an epidemic to get started.” When a story spreads faster than people lose interest in it, then it becomes a viral story.
Viral stories can be supercharged even further by reinforcing other stories. Shiller notes:
“Some narratives are contagious because they seem to offer a confirming fact. We can say with some accuracy that most people put on a show of their own knowledgeability and try to conceal their ignorance of millions of facts. Hence narratives that seem contrary to prevailing thought may have lower contagion rates that do not result in epidemics.”
Shiller gives the example of the dot-com bubble. A popular story during that time was that the internet would bring unprecedented prosperity by making all of humankind’s information available to everyone. By itself, that was a powerful story about empowerment, success, and the possibility of a utopia on the horizon.
The 2000 dot-com bubble was supercharged by other stories that overlapped with the promise of the internet story. Shiller includes the triumph of capitalism, business success stories, and nine other stories that interacted with each other to supercharge speculation in internet companies.
“If we want to know why an unusually large economic event happened, we need to list the seemingly unrelated narratives that all happened to be going viral at around the same time and affecting the economy in the same direction,” Shiller wrote.
However, Shiller also notes that these groups of stories - narrative constellations - are only partial explanations of big economic events. Humans are fickle, and their tastes can change spontaneously.
We Don’t Want What’s Best for Us
Anyone who’s traveled knows how common wheeled suitcases are. It’s so much easier to roll a heavy suitcase through a busy airport than lug a bag through it.
The idea of a wheeled trunk goes at least as far back as 1887, but roller bags didn’t become widely popular until the 1990s. What happened?
Shiller guesses that it finally got a key endorsement. In the 90’s, pilots and flight attendants still had an air of glamor. So, when Northwest Airlines pilot, Robert Plath, invented a roller suitcase, wheeled suitcases’ appearances weren’t considered ridiculous anymore. Shiller writes:
The epidemic was fueled when flight crews adopted the Rollaboards, and passengers saw these glamorous-looking people walking through airports, pulling their Rollaboards effortlessly behind them.
An idea that had been ridiculed for over 100 years finally gained widespread acceptance because the idea became associated with glamour.
We’re not perfectly rational people. We can evaluate reality to pursue and accomplish goals, but we don’t always know why we’re chasing those goals in the first place. We may think we’re chasing convenience when we’re really chasing status.
Narrative economics explains some of this unreasonableness. When we recognize that we’re driven by values and stories that are under the surface of our daily lives, we can empower ourselves to make better buying decisions.
If nothing else, we can recognize whether the stories we tell ourselves are worth living by.