The market for idiocy

By Francisco Dao , written on September 17, 2013

From The News Desk

In 1970, future Nobel Prize winning economist George Akerlof published a paper titled "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism" in which he explained how markets characterized by asymmetric information between sellers and buyers commonly resulted in declining quality of products offered for sale. In order to illustrate his argument he provided the example of a used car market flooded by “lemons,” low quality vehicles that appeared to be in good condition.

In a nutshell, the argument is as follows. In a market where the quality of products for sale is difficult to determine (such as used cars), if the majority of offerings are low quality “lemons,” buyers will come to distrust sellers and drive the average transaction price down to the “lemon price.” In this environment, the sellers of high quality used cars will only be offered lemon prices, since buyers can’t tell the difference. And since lemon prices are below the true value of the high quality vehicles, the sellers of good used cars will choose not to sell, eventually resulting in a market with only lemons being offered for sale.

If you’re wondering what this has to do with technology, one of the great prospects of the Internet was that it would be a worldwide marketplace for knowledge and ideas. Instead, it has fallen victim to the forces of the market for lemons and deteriorated into a market for idiocy.

Just as there will always be a few people willing to sell their quality used car at a lemon price, high quality information will never completely disappear from the Web. But in setting the “sell” price of most online information at $0, the Internet has essentially decided that knowledge will be set at the ultimate lemon price -- free! This puts the producers of high quality information in the same bind as the sellers of high quality used cars. They have to decide if they are willing, and financially able, to offer their goods at what is clearly a below value price.

This situation might be okay if online audiences were discerning and appreciated high quality information, but as a group they don’t. Online audiences actually want the lemons, or in this case, the idiocy. Consider how quickly sensationalist misinformation spreads online. Knowledge and ideas that require thinking are rarely ever spread socially or virally.

An example of the Internet’s insatiable thirst for the simplistic can be found in the popularity of listicles and link-bait articles. I enjoy a good Buzzfeed list or Mashable feel-good story as much as anyone, but this type of content has pushed high quality material to the unpopular edges. Even with my own writing, the columns in which I rant are consistently much more popular than when I write about more substantial topics. As a result of online audiences clear preference for low quality, easy-to-digest content, other than the content creator’s personal motivations, there is no incentive to produce serious work.

Furthermore, since Google provides personalized search results, and Facebook delivers content based on our preferences and friends, unless we’ve carefully curated our connections and interests, these filtering mechanisms assure that even if the Web as a whole is a market for high quality ideas, our “local” market will still be flooded with content designed to induce sharing instead of critical thinking. Personally, I have a wide range of friends including a fair number who can legitimately be classified as business or thought leaders, and the content shared on my Facebook newsfeed is still 90 percent garbage.

While it might seem like I’m blaming the advent of the Internet for the spread of low quality material, the fault is ultimately our own. Unlike a used car market where it is legitimately difficult to tell the difference between a lemon and a cherry, high quality information is still relatively easy to find online. We have simply chosen to consume lemon-quality knowledge because we’re too lazy and simple minded to appreciate more substantial content.

The manner in which we’re consuming knowledge is the equivalent of buying used cars with shiny paint but no engine or wheels. This is the most disappointing thing of all. It’s not the Internet’s fault. It’s our lack of discernment that has created this situation. Until we decide quality knowledge is more valuable than the simplistic and sensational, the Internet will remain a market for idiocy.

[Illustration by Hallie Bateman for PandoDaily]