Housefull Housefull Economics

It’s All About Me, Me, Me!

Our weekly explainer on economics using lessons from popular culture. In Installment 56, Liz in 30 Rock demonstrates the Egocentric Bias.

In an episode of 30 Rock, Jenna, an actress, asks her longtime friend Liz about her views on her new movie. She catches Liz in a white lie and tells her how she’s always done this through the years. Liz, however, remembers the instances a bit differently. According to her version of the same events, she was always supportive and never let her friend feel like she’s done a bad job.

It might not come as a surprise when we realize amid conversations with friends or family that we sometimes have differing accounts of shared historical events, mostly in a way that presents a better image of ourselves. We are also often guilty of presenting events to other people in a way that highlights our qualities, while downplaying mistakes or flaws. On a group project, while it’s reasonable that every member contributes at different levels, we tend to think that our contribution has been the most,  or at least the most important. At discussions on myriad topics over the lunch table, our input often has sprinkles of “But I have never seen this..”, “It’s true, it happened to me too!” and the like. These are all due to the Egocentric Bias.

As per one definition: “Egocentric Bias is the tendency to rely too heavily on one’s own perspective and/or have a higher opinion of oneself than reality.”

It is generally attributed to the fact that since we know so much more about ourselves (correctly or not is anybody’s guess) than others, we tend to give a disproportionate weightage to our views, knowledge and experiences over those of others. In some extreme cases of delusional manifestations of this bias, it sees a lot of overlap with the Dunning-Kruger effect.

This bias also affects how we remember things. A memory is not a real object–it is merely the stuff our brain has registered and chosen to save, combined with our thoughts and feelings at that particular moment. The egocentric outlook is what causes us to remember experiences, quotes, examples and ideas that are congruent with our own more easily. Everybody is a victim of this bias, and some amount of it is essential too, as research has shown that we remember events better when we view it from the scope of “what happened to me on that day?” instead of “what happened?” According to Anthony Greenwald, a psychologist at Ohio State University and an author of related papers and books, “The past is remembered as if it were a drama in which the self was the leading player.”

Many of our purchase decisions are guided by this bias. We regularly buy things that we think a person like us would buy because we have a certain self-image of ourselves, and want to curate things in our lives around this image. This can be topically seen best in eco-conscious consumption. People who go on unconventional and trendy diets (Keto, Paleo, Baby Food?) are rarely found not bragging about this fact or worse, trying to convince others to join the fray. They do so not solely because they care for the people around them and want them to become healthier as well, but because they believe that theirs is the best way to live and others must hear of it, if not convert. People who only purchase clothes and accessories that are organic, cruelty-free, ethical and the like also tend to announce the same at every opportunity possible. It’s not because they care about the environment but also because they see themselves as people who are environmentally conscientious and want others to see them as the same. No wonder they never shut up about the no-wastage, no-harm nature of their clothes while causing harm to the people and relationships in their lives.

A lot of purchases, especially that of non-essential items, can be viewed similarly. These goods are consumed not on the basis of what we need but what we aspire towards because we want to own things that signal what we think of ourselves, rather than what we actually are (something that we aren’t even aware of unless a lot of meditation or psychedelic drugs are done). This explains the fondness for goods that have monograms or labels or designing that showcases what brand one is wearing.

Most luxury brands follow a strategy called The Pyramid Model. At the top of the pyramid, there is the griffe – the creator’s signature engraved on unique work (think of handmade Louis Vuitton bags). The second level is that of goods produced in small series within a workshop (LV shoes, belts). The third level is that of streamlined mass production: here we find lower priced items like wallets, keychains, sunglasses and the like, which are affordable enough to be bought as an aspirational purchase, and also have heavy logo visibility. At every level, a person aims above and chases higher-value goods because they see themselves there, and not at the level they’re stuck at.

I am telling you this is true. It has happened to me too.

 

 

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About the author

Reshu Natani

Reshu Natani is a former social entrepreneur who studied economics and public policy at Meghnad Desai Academy of Economics. She now uses Keynes’s aphorism about being dead in the long run to justify her nihilistic hedonism.