Quotation of the Day…

by Don Boudreaux on December 1, 2013

in Competition, Complexity & Emergence, Economics

… is from page 123 of by GMU Econ colleague Tyler Cowen’s great 2002 book, Creative Destruction:

Often a brand name certifies creativity rather than uniformity or homogeneity….

Brand names allow artists to experiment with different styles, without fear of losing their “in” with the audience.  Picasso changed styles many times, but buyers knew they were getting a Picasso.  If we imagine a world where artworks are produced under true anonymity (i.e., with no brands), it is not obvious that quality and diversity would improve.  The most successful artists, for instance, might try to re-create their greatest triumphs, so that the audience could identify the product as theirs.  Brand names remove this fear of anonymity, by telling audiences when they should take a second look or when they should pay heed to a new style.

Branding is one of the many institutions that would not exist in the world of perfect knowledge, or of no asymmetric information, that still stands as the ideal against which too many economists compare reality.

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