iReputation

This Christmas, I'm finally jumping on the bandwagon and asking for an iPod. A conversation with Becky got me thinking as to why the economy often bears witness to consumer trends. Some might claim that people are stupid and buy whatever ads tell them to buy. Or that they are superficial and competitve, buying a thing because everyone else buys it. These are both only part of the story (if they are a player at all) and often leave the question unanswered.

An often cited explanation is what economists call path dependence. A new product hits the market, a few people but it and like it, products are made and perfected to work with it, encouraging more people to buy the same product. People buy iPods more than their equivlent because of the plethora and quality existing other products (from iTunes to adapters).

Another explanation is related but distinct enough to mention on its own accord (and is also the reason I requested an iPod). Every year, countless cutting edge products enter the market, most of which often fails in unpredictable ways or doesn't live up to expectations. And even if it does what it is supposed to do, it is hard to tell how useful the new, expensive device will be.

Thus, reputation matters. I personally am looking to jump on the bandwagon because testimony after testimony suggests an iPod is a quality product I'll use all the time--you won't know how you lived without it. I know nothing of mp3 players--iPod's competitor. I'll bet that reputation plays a large part in why some products triumph over others which are very technologically very similar. It's not that people are mindless consumers. Indeed this explanation shows most of them are thoughtful and cautious buyers, a tendency that increases as the price does.