Money 2.0: Let's Go Shopping!

This is Hidden Brain. I'm Shankar Vedantam. All of us are surrounded by brands. Designer brands.

Calvin Klein's Obsession.

Oh, the smell of it. Bargain shopper brands. You're going to spend $20 every month on paper towels anyway. You're throwing your money away.

The mini Shamwows are for everything.

Brands for seemingly every demographic slice among us.

This is what I've been waiting for. Our Minecraft wrapping paper.

Hey!

It's my Christmas gift.

Have you ever stopped to ask how brands influence you? Is it the slick advertising, the relatable characters, or the story?

Lance Armstrong would go out there, you know, with this story of, I beat cancer, and I'm going to put on my gear. I'm going to put on that yellow bracelet. I had about 50 of them.

Today on the show, we conclude our Money 2.0 series With 2 of our favorite conversations about the psychology of brands, how companies create a worldview around the products they sell and then get us to make those products a part of who we are, this week on Hidden Brain. Support for Hidden Brain comes from Instagram. Instagram teen accounts' automatic protections limit who can contact teens, the content they can see, and the time they spend on the app. Teens are automatically placed into Teen Accounts. Teens under 16 will need a parent's permission to change any of those settings to be less strict. Learn more about Teen Accounts and Instagram's ongoing work to protect teens online at instagram.com/teenaccounts.

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Fidelity Brokerage Services, LLC, member NYSE SIPC. Support for Hidden Brain comes from Progressive. Whoever says saving money is hard doesn't know that new New customers who bundle and save with Progressive save hundreds. Because switching your home and auto insurance is better than cutting down on those iced lattes you love. Switch to Progressive and see if you could save. Get your quote today at progressive.com. Progressive Casualty Insurance Company, affiliates, and other insurers. Not available in all states. Americus Reed knows what it feels like to be an outsider, to be surrounded by strangers and to have to figure out how to fit in. Today, he's a professor of marketing at the University of Pennsylvania. But when he was 17, he was the new kid, one of a handful of Black students bused to a predominantly white school. He remembers his first day, getting on the bus with the other Black kids from faraway neighborhoods. They were scared.

But we didn't want to show any weakness, so we kind of waltzed in and walked in with confidence. And I remember the world stopping and everyone looking up and sort of saying, who are those guys?

He wanted to be accepted, so he came up with a plan. He would become a social chameleon.

I sort of settled on this idea that I would try to be what was almost like a boundary spanner. So I hung out with the nerds, I hung out with the jocks, I hung out with the musicians. I hung out with all different groups and in that sort of social chameleon, as I would sort of go from group to group, I would try to kind of fit in in a way that allowed me to have some kind of affiliation with that group.

As he spent time with these different cliques, he noticed that each had its own set of badges, its own language. And he realized that if he could speak that language, adopt those badges, he would start to blend in. So he started buying stuff. He started wearing the things the other kids wore. Often it was about shoes. With the athletes, he wore Nikes. With the musicians, Chuck Taylors. With the hip-hop kids, Adidas, but without the shoelaces. They were like costumes, only deeper.

A brand can communicate something. How you wear your pants can Communicates something. The particular sort of portfolio of colors that you choose to adorn yourself with can communicate something.

Americus understood that personal brands are like flags. They tell the world who you are or who you want to be. They telegraph, I'm the smart kid, I'm the rich kid, I'm the athlete. They're a form of self-expression.

A brand is so much more than a tagline or a logo. It is more of a meaning system. And so a brand is kind of a promise to deliver on those values and to connect consumers who might have in their minds a sense of synchronicity with what they believe those values are.

We'll talk more in the second half of our conversation about the psychology of brands and the link between brands and behavior. But I want to start by looking at some examples of what you're talking about, American There are people who say, look, brands don't matter, as you said, I just buy what's functional. And then there are people like these characters from the CBC TV show Kim's Convenience.

What are you doing? Oh, these shoes don't play basketball.

They're basketball shoes.

You can tell by the little man playing basketball on them. No, your shoes are basketball shoes. My shoes are collector's items, and I intend to keep them that way.

Ah, I guess it'd be bad if you got some burrito juice on them sneaks, huh?

Get that burrito away from me! Get your shoes away from my special edition burrito!

Dude, I'm not joking! These shoes, they're my legacy. So talk to me, Americus, about what's going on here. How can a pair of shoes feel like a legacy?

I think that it's very interesting, Shankar, because a pair of shoes, if positioned the right way, can encapsulate a story. And that story might be, for example, a story about success or a story about overcoming the odds or a story about being able to have a kind of level of greatness that you would not be able to have but for the shoes. And so when Michael Jordan puts his shoes out there, there is the idea that— and it's very clear, right? So it says, be like Mike. What does that mean? It literally means that if I wear these shoes, I will sort of encapsulate some of that mystique because I am wearing the shoes as well. And so it's a very powerful way That a brand can tell a story that can connect with a person's or a consumer's sense of identity that can then create this sense of legacy that the individual in the clip was referring to.

So when you think about brands in the way that you're describing them, not as tags or even as just as names or commercial— a way to sort of commercially identify a product, but really as stories, as narratives, how valuable are these stories, commercially speaking?

Oh, they're tremendously valuable. And the reason that they're valuable is because they create a kind of impervious connection that's hard to break. If a consumer connects with a brand or a product in terms of an identity argument, instead of an argument about how better the features are of the product compared to something else they could buy, then what is happening is that there is an insulation from the brand's competitive attacks, because once a person believes that a brand is part of who they are, then asking them to go to another brand is essentially asking them to change who they are. And that is an incredibly powerful psychological gravitational pull. that is really hard to overcome. And that value in terms of customer lifetime value is a real economic entity because it literally means that the person is going to be on board and be buying for a very long time and be willing to do your own marketing basically for free because they are advocates of the brand. They are what we refer to as brand evangelists because they are now willing to go out there and protect the brand. So that value is massive in terms of creating this type of connection that can last with consumers for a very long time.

You've used a technique called social listening to study the fans of a very iconic brand, the tech company Apple. What is this technique, and what do you observe among Apple fans?

This technique called social listening is a combination of artificial intelligence and machine learning, where we literally go out into the internet and we identify conversations that people are having online about brands. And what we particularly find with Apple is that there is a special, unique kind of conversation quality that happens between very fiercely loyal Apple users. And they talk about the brand In a fascinating way, there is language about the brand that almost feels as if the individual consumer is talking about religion or politics. There's a kind of fierce, very powerful, emotional way that consumers talk about the Apple brand.

Today I'm going to be showing you all of the Apple products that I own, from old to new, everything that I own from Apple.

Something else, portrait mode. Oh my God, I'm literally obsessed with portrait mode. Like, just because I mentioned that I have an Apple tattoo on my arm, and I wouldn't say I would get it again. I was 100% Apple obsessed.

Like, I would say 75% of the conversations that I had ended up talking about Apple. And so Apple has been very good at creating this kind of emotional connection such that Consumers, once they're on board, Apple can basically say, hey, we would like for you to buy a new charger, which is kind of absurd. But consumers are like, sure, I'll do that, because they are so bought in. Whereas they could go to Android and they could not have to ever deal with buying new chargers, et cetera, et cetera. But they're willing to do it. They're willing to stand outside in the cold, Shankar, in a line and wait for hours and hours and—

Hours.

commiserate with fellow Apple loyalists to get that shiny new thing in the box. They don't have to do that. There's something that is not rational about this, and it's reflected when we look at and analyze the text conversations that occur between these fiercely loyal Apple folks.

Now, Apple fans might say they are not deluded about their gizmos. They might argue that Apple products are objectively better than other tech products. But Americus points out that you see the same brand loyalty when 2 products are objectively identical.

The example that I always use in my class is a very simple example of over-the-counter pharmaceuticals, the Walmart or the Walgreens brand versus Tylenol. And the fact that you can have a product that is essentially identical in terms of its active ingredients, but yet one will cost 27% more in the store, and people know that the Walgreens brand is the same thing as the Tylenol brand, and that entire market for Tylenol actually shouldn't exist if people are rational. But what it says is there's something else above and beyond the features that has utility.

You can also see the power of brand loyalty in sports. Americus has spent a lot of time analyzing fans of the Philadelphia Eagles football team. People like Patrick Muller, who demonstrated his commitment to the Eagles with a massive RV plastered with the team mascot and logo.

Eagle One is Patrick Muller's $300,000 homage to his beloved Philadelphia Eagles.

I'm sure there's not any Eagle fan that has been more to games than I have in the last 6 years.

Since 2006, this eagle has nested at every single game, home and away.

Talk about this, Americus. How do people like Muller go from being consumers of a product to effectively being ambassadors of the product?

The Eagles are intricately connected with the city of Philadelphia, right? The scrappy, gritty city of Philadelphia, the underdog Philadelphia, the blue-collar Philadelphia. And for Patrick, living those values and going to those games and being there when the team is awful and wanting to represent your city through the sport, through the Eagles, is something that's a special characteristic, especially in this city, of those fans that are Philly sports fans. And so for Patrick, he essentially immersed himself into this identity and almost lost himself. His identity, I would say, Shankar, is completely fused with being an Eagles fan. He's literally taken this beautiful RV and he's gone to all of the games since 2006. I mean, think about— well, you gotta have a lot of time on your hands, but think about the commitment. Think about the loyalty to do this and to create an image and a spectacle. And the Philadelphia Eagles, I mean, if you're a brand, you're like, oh my God, how do I How do I clone Mullers of the world? How do I get all these fans to get so excited that they'll put the tattoo on their body? How do I get people to do that, to be my sort of walking billboard, my one-man, one-woman marketing department for free? And this is beautiful because it points to the fact that if you can kind of do what the Eagles did with respect to keeping consistent and authentic with their story, You can create these types of fans, draw them in, and reinforce what they want to try to express to others. And so promoting him and sort of bringing him to the forefront for the Eagles franchise and football team is a genius thing to do because you're literally just piggybacking on the fact that you've got a hardcore evangelist that is so wrapped up in your brand. that he's willing to do these things to advocate on your behalf.

So if you have companies that actually want to create these brands from scratch, to build them up from the ground, lots of companies now recognize, of course, that this is a powerful thing to do. So lots of companies want in on this. Here's a clip from Ellen DeGeneres about one company's efforts to create a distinctive brand.

It's a new product from BIC, the pen company. And they have a new line of pens. called Bic for Her. And this is totally real. They're pens just for ladies. I know what you're thinking, it's about damn time. Where have our pens been? Can you believe this?

We've been using man pens all these years.

Yuck!

So what went wrong here, America? Why did this ad campaign fall flat compared to the stuff that Apple does?

The answer is, when a company is trying to hone in on a specific identity to make a connection, a relevant connection to its brand, it has to understand that identity in an almost sociological way. And in the case of BIC for Her, I think it's quite clear that the correlation between gender and buying pens is zero. And so if you try to tell a story that says, these are the pens for women, then the question— if you don't get immediately thrown out of the building, the question will be, okay, tell me why these— why? Why are these pens, quote, for women? And I think in the specific case of Bic, for her, there was nothing underneath the hood, so to speak, Shankar. It was just kind of perceived as this. This gimmick, we call this, by the way, Shankar, in the marketing and business world, when you do not know how to market to women, we call it shrink it and pink it. And it's like, it's a huge mistake because you didn't bother to try to understand women. That's very clear. And in fact, you went the opposite way in telling a story that would almost be perceived as insulting to women, like taking the feminist movement backwards in terms of identity, because it's like, well, wait a minute, we don't need the pen for women. And so because you didn't understand that identity and you didn't take it seriously, you didn't study it, you didn't sociologically unpack it and analyze it and try to understand its connection to that specific decision-making process, you make dumb mistakes like Hal Bick made.

I want to talk a moment about a non-business, non-consumer setting. Republicans and Democrats don't think about their political parties as brands, but it sounds like they almost relate to them in the way people relate to brands. I'm wondering, is the animosity we see in the country between Republicans and Democrats less to do with ideology and more about brand loyalty?

Political parties are indeed brands. And what we're witnessing today, right now, is the almost perverse extreme aspect of when identity and identity loyalty and identity connection goes way off the rails. And so the notion that political parties are now becoming tribes is very, very clear and making connections to their identity, right? So if you have a proposition to say, I would like to build a wall to help with immigration. You can make a functional argument about a wall, or you can do what Republicans did, which is to make an identity argument to say that wall represents keeping some group of individuals out that we don't want in this country for lots of different reasons. That's an identity argument. That's an in-group, out-group argument. That's an emotional argument and so on. On the other side, the other side says this wall now represents something that is antithetical to how they see themselves. It represents oppression, discrimination. It represents all things evil. So there's no way the two can have a conversation about trying to settle an issue on how to move forward with a policy around that wall, because the wall now has become a symbol of identity. It's all about your tribe. It's all about the values that you are trying to protect, that you believe that you are trying to protect, as they are encapsulated in your particular political brand.

When we come back, what happens when your favorite brand breaks your heart? You're listening to Hidden Brain. I'm Shankar Vedantam. Support for Hidden Brain comes from Progressive. Whoever says saving money is hard doesn't know that new customers who bundle and save with Progressive save hundreds. Because switching your home and auto insurance is better than cutting down on those iced lattes you love. Switch to Progressive and see if you could save. Get your quote today at progressive.com. Progressive Casualty Insurance Company affiliates and other insurers. Not available in all states. Support for Hidden Brain comes from Quince. We all have those pieces in our closet that we can count on— the versatile jacket, the perfect t-shirt. These are the pieces that make getting dressed easy, and that's what Quince does best. Quince makes elevated, everyday essentials using premium materials in designs that are timeless, thoughtfully crafted, and made to be worn again and again. And when the temperatures start to drop, Quince makes it easy to build on these everyday staples with versatile layers designed to keep you warm and comfortable all season long. Find your next fall favorites at Quince. Download the Quince app for app-exclusive offers, or go to quince.com. Get free shipping on your order and 365-day returns. Now available in Canada and the UK too. And when Quince asks where you heard about them, let them know it was Hidden Brain. This is Hidden Brain. I'm Shankar Vedantam. When Americus Reid was in his early 40s, a doctor told him that his knees were in bad shape. He needed to give up basketball and running. So he started to look for another sport that would be easier on his joints.

I got into cycling and found the sport and fell in love with the culture immediately. And like a lot of people, I connected with the Lance Armstrong brand. And actually, Lance Armstrong plus Nike plus America equaled something that was so aspirational in my mind. Armstrong is a man who rides on courage and guts. Lance brought me into the world of professional cycling in terms of actually watching it, watching the Tour de France. What a performance by Lance Armstrong. This is me now as he drives up to the line. And I fell in love with Lance because his story, Shankar, his story of, I beat cancer and I'm gonna put on my gear, I'm gonna put on that yellow bracelet. I had about 50 of them. And the jersey, The shoe warm-ups, everything. And I would go— I bought the bike that he used. And I would be out there and I would be channeling Lance Armstrong. I would think about Lance Armstrong in the mountains. And it was, for me, deeply emotional. And when little whisperings came out that, well, wait a minute, people are accusing Lance Armstrong of cheating, I was the first to say, you're wrong. No way. This is not happening.

Has just announced moments ago it will ban Armstrong for life and strip him of his 7 tour titles.

And it was heartbreaking from the perspective of my identity, because what happened was I lost a part of myself. And when it came out that Lance Armstrong is a fraud, Lance Armstrong is a charlatan, I literally remember the day that I went and got all of my Livestrong and Lance Armstrong gear, and I put it in a bag, and I set it outside. It was almost like a funeral, Shankar. It was like, it was a moment of grieving because This iconic aspirational self turned out to be a shallow and hollow fraud. And I felt foolish. I felt like I was a fool in that relationship with his brand because I was trying to reinforce and express all of these values that turned out not to be true.

It's so interesting, isn't it? Because at one level, Lance Armstrong doing well Him beating cancer, him winning the Tour de France really has nothing to do with you. And his cheating and his doping also has nothing to do with you. And yet you triumphed when he triumphed and you grieved when he fell.

You're touching on something I think is the key premise of identity connections between consumers and brands, Shankar. And that's the idea is that once my identity fused with that, I was in sync with his highs and lows. And the idea that even though his performance, his approach had nothing to do with me, I was using that story, not only on the bike in a literal sense, but also kind of in my life, in a figurative sense, in the sense that I would almost think about, mentally represent Lance on the bike. when I was faced with a challenge in my professional life or in my personal life. And I use that energy, that motivational impetus that's coming from the brand, that's haloing off the brand, that I'm consuming from the brand. I'm using that for me as a source of energy that allows me to push through, to soldier on. And all of those different values that are associated with the idea that I'm putting in the work on the bike, I'm diligent, I believe, I believe in myself. I'm going to work hard, and I'm going to overcome great obstacles. And so even though it had nothing to do with me, I was drawing upon that energy. And when I found out that the energy was actually poisoned, then it sort of resulted in this deep sense of loss for me.

You conducted a study with Amit Bhattacharjee and Jonathan Berman, how we sometimes decouple problematic aspects of a brand with the things that we admire about the brand. If Lance Armstrong had been caught stealing rather than doping, I'm wondering if you could have decoupled your admiration for Lance Armstrong, the athlete, with your distaste. Was the fact that the unethical behavior was in the same domain as his accomplishment that made them difficult to disentangle?

In the paper that you referenced there, we refer to this notion that you're talking about as moral decoupling. And so it's based on the fundamental premise that if there is an individual that you have a natural inclination to want to support, then what we know about psychology is that humans will figure out ways to rationalize the support for that individual that they want to support to uphold a belief that they want to have. And so they will try to interpret the world around them in ways that allow them to uphold those beliefs.

An example of this is the tale of Tiger Woods. At the end of 2009, he stepped back from the sport of golf after tabloids broke the news that he was having an affair. The golfing world was split between those who were appalled by his behavior and stopped supporting him, and those who stuck by his side.

If you look at his story, what did he do? Well, he cheated on his wife. And so cheating on your wife presumably has nothing to do with your golf game. So if you desired to support Tiger Woods, you could make the mental argument in your mind that would reflect moral decoupling. You could say, well, you know, I don't really agree with this whole thing that he might've been doing in his personal life. However, I really like his golf game, so I'm going to continue to support him. And so what's interesting about moral decoupling If that bad thing that the celebrity or the person does is not related to the performance that you admire, then you can pull it apart in your mind and you can almost ignore, if you will, or not even comment on the morality of the bad thing, because you can simply focus on the performance and the fact that you admire what they do. in that performance domain. And so it's a very interesting aspect because in the case of Lance Armstrong, it was impossible for me. And I'm going to tell you the truth, Lord knows I tried, but it was impossible for me to pull those 2 things apart for Lance Armstrong. And that's why all of his clothes ended up on my sidewalk.

Now, there are lots of people, Americus, who think that the idea of building a brand is just distasteful. It's just marketers and big companies trying to hoodwink customers hoodwink consumers. Frank German, Aaron Garvey, and Lisa Bolton once conducted an interesting study involving Nike putters. And when I spoke with Frank German, here's how he explained the study to me.

About half of the participants were told that they would be putting with a Nike putter, whereas the other half of participants were not told what putter brand they would be using. Importantly, all participants used the exact same putter. And, you know, interestingly, our results showed that those who thought that it was a Nike putter on average needed significantly fewer putts to sink the golf ball.

What's going on here, Americus? In some ways, this is connected to what you were telling me about wearing your Lance Armstrong gear and biking and feeling like you were doing better. But this actually suggests this isn't just a feeling. You actually might have biked better when you were wearing your Lance Armstrong gear.

What it literally shows is the placebo effect, which is what they're really tapping into here. It's real. You have been told about Just Do It for so long. You believe that that brand endows a performance advantage, so much so that the psychological perceptions of that brand literally translate in your ability to actually perform, to make those putts in fewer strokes. And that to me is the most salient and powerful example of this notion that the power of brand is so intertwined with the perceived expectations of the behavioral activities that are built into that narrative or that story about the brand that they literally translate into advantages for the brand that really shouldn't be there for all intents and purposes. I wish someone would have put the metrics on me and done the controlled experiment where I didn't know it, double-blind, where I would be on my bike with and without the Lance Armstrong clothes and see, because I would be willing to bet. I remember days going out and riding the bike. I remember this one time where I was trying to go up this one hill and I was struggling. I looked down and I could see my Livestrong band on my wrist and I looked down And I unzipped my bike jersey like Lance does. This is something Lance used to do when he was about to get serious. He would unzip his jersey and he'd take his cap and he'd flip it around. And he's like, this means that he's signaling to his competitors, I'm about to get very, very hardcore into this. And I'm about to take this to a whole new level. I remember doing that. And I remember powering through this hill and getting to the top and imagining in my mind Those fans of Lance that would be at the top of the hill cheering him on. I'm willing to bet that my performance improved when I was wearing his gear.

You've talked in the past about how branding can be a force for good, that it can help companies that are mission-driven companies accomplish great things. But I'm wondering if you can also talk a little bit about this challenge that branding has. A lot of people see it as manipulative, see it as inauthentic. Does branding have a branding problem?

That's fantastic. I love that question, Shankar. The answer is yes. And it's unfortunate because branding in and of itself is neither inherently good or bad. So it's kind of like the analogy that I like to use when I'm talking about this. is that branding and marketing more generally is like a hammer. And so you can take a hammer, and if you want to, you can build a house for a homeless person, right? But you can also take a hammer, and if you want to, knock an elderly person upside their head and take their wallet. There's nothing inherently bad about a hammer. It's how you use it. And why not use it as a force for change, as something powerful and positive. For example, if you are a brand that is a sports company, isn't it great that you can actually become the motivational impetus for a consumer to want to exercise more and to make themselves healthier for themselves and their loved ones? Isn't that a good thing? I think that's a good thing.

Americus Reed is a psychologist and professor of marketing at the Wharton School at the University of Pennsylvania. When we come back, how we use the things we buy to reflect not just who we are, but what we believe in. You're listening to Hidden Brain. I'm Shankar Vedantam. Support for Hidden Brain comes from Stripe. Stripe is built for whatever comes next, because scaling your business model isn't a set-it-and-forget-it thing. You want to test, iterate, and launch new pricing plans constantly. With Stripe Billing, you can easily experiment with new subscriptions and launch new usage-based and hybrid pricing models so your revenue model can change as fast as your product and market fit evolve. Reach new customers, expand globally, and keep revenue operations ready for whatever comes next. Stripe Billing powers any business model. It's built to support you no matter how much you scale, with a network powering more than 1.6% of global GDP and the partner of choice for 86% of Forbes AI50 companies that have monetized to date. Learn how you can power any business model at stripe.com/billing. Support for Hidden Brain comes from Instagram. Instagram Teen Accounts automatic protections limit who can contact teens, the content they can see, and the time they spend on the app. Teens are automatically placed into Teen Accounts. Teens under 16 will need a parent's permission to change any of those settings to be less strict. Learn more about Teen Accounts and Instagram's ongoing work to protect teens online at instagram.com/teenaccounts. Support for Hidden Brain comes from U.S. Bank, With the U.S. Bank Smartly Visa Signature Card, you earn an unlimited 2% cash back on every purchase. No quarterly activations, no categories to track, just unlimited 2% cash back on every purchase. Visit usbank.com/smartlycard to learn more. The creditor and issuer of this card is U.S. Bank National Association, pursuant to a license from Visa USA, Inc. Some restrictions may apply. This is Hidden Brain. I'm Shankar Vedantam. Niru Paharia first became interested in the psychological power of consumer products because of the diamond industry.

The diamond engagement ring.

How else could 2 months' salary last forever?

A diamond.

I studied economics as an undergraduate, and one thing they tell you as an economics major is that people are rational.

But as far as Nero could tell, there was nothing particularly rational about buying a diamond. Now, you can argue that diamonds are beautiful, but there are cheaper stones that are just as pretty.

So then the question is, why are people spending so much money on these shiny rocks that have no intrinsic value? You know, there's effectively a perfect substitute. And then it seemed like it was all this kind of psychological stuff, that people wanted to express their status, people wanted to kind of fit in with sort of the normative practices in terms of marriage and It's just sort of dawned on me that products have all this psychological value and that's worth real money. I mean, a whole industry is based on just sort of pure kind of signaling and psychological value. And I found that to be really interesting and sort of at odds with this notion that people are rational.

This idea made Niro, who's now a marketing professor at Georgetown University, think about the other ways we use money as a signaling device. to express our beliefs and our values.

We enact our political will usually by voting or supporting different kinds of legislations and things like that. So it's kind of interesting when people start taking that civic actions, these kind of civic actions into the market, and then start boycotting or boycotting a certain brand or a certain company in order to express their view. And you can kind of think about it in terms of What ends up being more tangible? So if we think about voting, it's sort of an abstract process. It's not very public. Whereas when you buy a product or avoid buying a product, it's very tangible.

If you're someone who doesn't buy flashy jewelry, you may say, okay, I'm not one of those people who uses money to talk. Maybe. Or maybe you just don't use diamonds to talk. You use coffee.

I've studied the situations between small coffee shops and large coffee shops. And so I have a paper where we show that, for a small coffee shop, if it's just sitting there by itself, people don't really think much of the political situation. They just think more about the coffee, sort of about the more rational economic features and attributes of the product. But as soon as you put a large competitor in next door, say you put a Starbucks in next door, all of a sudden, it becomes this fight between the little guy and the big guy.

Mm-hmm.

And then buying your cup of coffee is really meaningful. All of a sudden, it's a symbol of what you believe in. It's a symbol of you supporting the little guy, of you supporting the underdog and trying to stick it to the man. And it's so tangible. And I just find it so fascinating that that's sort of how we kind of express our political views on a daily basis. And we feel powerful, in a sense, that we actually sort of have a say in the situation.

Companies, of course, pay attention to what consumers want. They understand that people don't just want to buy a cup of coffee or a computer. They want the right story to go with that cup of coffee or computer. This is why so many Silicon Valley companies that are worth billions of dollars spend so much time telling us about their origin stories— how 2 kids dropped out of college to explore a dream, So this is what we call—

we have another paper around underdog brand biographies. And this sort of idea of kind of starting in a garage from humble beginnings, but overcoming obstacles to kind of fulfill your dream, that's a really compelling narrative, especially to Americans, I think, because of the whole kind of pull yourself up from your bootstraps and this whole notion of the American dream. And so companies that take advantage of that narrative, and if they use it effectively, even as they grow, can kind of remind consumers of that consumers that this was a small company, and they might identify with it more, and thus penalize them less for being a large company. There tends to be sort of a kind of an aversion or a disdain for large companies. People tend to identify a lot more with smaller companies.

And you tell the story of Nantucket Nectars, which also has the same sort of startup story.

A lot of companies, they talk about how— Nantucket Nectars in particular talks about how they started with a blender and a dream, and Clif Bar. Talks about how they started in their garage with— he was living with his dog and his skis and was cooking. And it's this sort of underdog narrative that makes use of this sort of external disadvantage, but really trying hard. And I think people really, really find that story resonating because I think we all on some level feel like underdogs. And so it sort of can be motivating to us.

Of course, the underdog is not the only type of brand that can draw us in. In fact, Niru has found that brands that are powerful, brands that might be seen as the opposite of the underdog, can also attract people. One example, Walmart.

Yeah, it's kind of interesting. So there is this relationship between status and power. And so status is a way— is sort of what we get when we have power. And so when we think about power, we can think about Walmart as being a really powerful brand. It has a lot of strength in the marketplace. And so that strength, that kind of access to power, having a lot of resources as a brand in itself, even though it's kind of a low-end brand, if you compare it to other low-end brands, that can be kind of attractive to people who care about status.

Many of us understand the economic choices we make can have real ethical consequences. The products we buy can adversely affect the environment or take advantage of poor people in distant countries. We can buy stuff from stores that treat employees well, or we can buy things sometimes at a cheaper price from stores that treat their employees poorly. Often after a big news story about conditions in sweatshops or the use of child labor, there's public outrage. But as Neeru has explored, our actions don't always match our rhetoric.

She once wrote a paper on the subject titled Sweatshop Labor Is Wrong, The idea there is that you kind of decide how much you like something. And so you really like a pair of shoes. And so then kind of the moral reasoning starts from there. It doesn't start from kind of a neutral place where you're like, where you say, oh, sweatshop labor is wrong. You know, under any circumstances, I don't want to subject people to these unfortunate working conditions. It actually starts at a place where you're like, well, the product's really nice and the shoes look really good on me. And then you start to think about the moral implications. you start reasoning about it, and that's called motivated reasoning. So rather than think about morality in terms of this kind of objective thing, we kind of think about it more like a lawyer. So we decide what we want, and then we kind of come up with the reasons to support it. So we may say, oh, if we see a pair of shoes that we don't like, we may say, oh, sweatshop labor is wrong. I don't like sweatshop labor. I don't approve. But if the shoes are cute, you might say something like, oh, it's okay because people need jobs or companies need to make money. So you'll be more likely to agree with these things because you're motivated. In a sense, the shoes are really cute. You really want them. And so you want to find a way to reconcile your distaste for this situation and the reality of it.

And you've actually conducted experiments which show that people are more likely to reach for these kinds of rationalizations when they actually like a product.

Yes, exactly. So if they like a product, if you show them an attractive pair of shoes, they'll be more likely to agree with these economic justifications. If you show them an unattractive pair of shoes, all of a sudden, they become these kind of moral animals who say, oh, no, it's wrong. And so the idea is that we just decide what is moral based on how much we want something.

One thing you've looked at is that we're often willing to go along with products that are ethically problematic so long as we can come up with a way to distance ourselves from the unethical behavior that produced it. The more distance we can put between ourselves and the unethical behavior or the unethical action, the easier it becomes to perform. So this goes to the idea that if I went to the grocery store and asked for a chicken, and they went out and killed a chicken for me, I would feel worse about that than if I was just picking up the chicken from a tray. And of course, in both cases, a chicken had to be killed. But in one case, I feel like I have actually asked for the chicken to be killed. In the other case, the dirty work has already been done.

Yeah. So there's a number of things that enable us to not feel so close to the harm. I mean, essentially, your brain buying a product from a company, but what you're doing is you're hiring them to do kind of this dirty work for you. So say any, any clothing company, they're the ones who hire, you know, a child and maybe, you know, under some unfortunate conditions. You're not directly actually hiring that person. But I think the second thing that happens is this idea of the order of how kind of supply and demand happens. So we live in an economy where Most items are produced first, and so they're already produced, they're already in the store, and so when you go to the store, the damage has been done, so to speak. So it's already been done, it's already happened, but imagine that you went into that same store and you had to order your chicken or your clothes on demand. So if you order it on demand, you know, they then, they will put a child, you know, have them work under these unfortunate conditions, and then you start feeling responsible. and guilty for this situation where, when it's already happened, you feel like, oh, well, it's already happened, and I'm not responsible for it. And I think people don't really kind of see this broader role that consumers have in creating demand for these kinds of products. They don't see that A causes B, because it sort of happens backwards, that they actually make the product first, and then you decide if you want it. But if we lived in an economy that was all on demand, then it would happen the other way. You would decide you want it, and then they would make it. And then there would be a stronger connection, kind of a stronger cause and effect connection that I think people would then feel a bit more responsible and a bit more guilty for these kinds of situations.

I can imagine that people would feel horrible if they said, I want a shirt, and they have to send some poor 9-year-old kid into the basement to make the shirt for the next 6 hours. I mean, people would feel awful about that.

Yeah, and I think people wouldn't do it. And so then it kind of gets to this question of, Does the economic structure and the structure of how goods are made, does the kind of logistical structure impact how we think about ethics and how we think about our own role in enabling these kinds of harms?

The companies who make stuff for us are run by people, and those people have minds that work like our minds. So it should come as no surprise that just as consumers would rather have companies do the dirty work for them, To distance themselves from the ethical consequences of their economic actions, companies often choose to do exactly the same thing. Rather than run a factory that makes clothing under awful working conditions, why not outsource the dirty work to someone else? If a reporter unearths details of poor working conditions, you can now plausibly say, but I didn't know about it.

In many cases, companies actually do outsource the harm. Rather than own the factory that makes the clothing under, you know, these terrible conditions, we outsource them to other firms that are owned by other entities. So a lot of these companies do try and claim that they had no knowledge of this. This did not happen within the boundaries of my firm.

It turns out that both individuals and companies often prefer to be kept in the dark about unethical practices that are further up the supply chain.

So there was a really, really interesting paper by Julie Irwin and some other colleagues who wrote a paper on this idea of willful ignorance. And the idea was that you had a product and you had access to a whole bunch of different pieces of information. And one of them was the labor conditions or the environmental conditions. And the question was, do people actually ask for this information? You can look at it if you want, but you could decide not to look at it. And it turns out people didn't want to look at that information. Because they didn't really want to be confronted with this kind of conflict between their beliefs and, and, you know, what they really wanted. And they found this effect was stronger for people who cared more about labor issues, who cared more about environmental issues. They were more likely to avoid, you know, avoid this information in order to kind of avoid this conflict.

Think of the deep irony of what Nero just said. The folks who care the most about ethics might be most willing to turn a blind eye to unethical business practices because they know if they found out about those practices, they would feel obliged to do something about it. We've talked about the many ways in which consumers and companies play games with one another, using products to speak on their behalf or using products behind which they can hide. But there's one dimension of economic activity we haven't explored. explored, and that's time. I asked Niru how some of us use our calendars to broadcast our social status. It used to be that people once broadcast their social status by being idle, but that idea has been turned on its head in the United States.

It turns out nowadays that people who are busier actually seem to have more social status. So rather than somebody who is very wealthy who could waste their time, take fancy vacations, you know, invest in learning these kind of archaic mannerisms. It turns out the person who works really hard, who's really busy, who's very effortful, is the one who seemed to have more social status. And I think in part, that is because we live in a society that values social mobility. So we actually conducted the study in the US, and we conducted the same study in Italy. And we found that for Italian people, they thought the person who was living a life of leisure had more status. Of course, they have so much money, they can just relax all the time. Whereas in the US, they thought the person who was working all the time actually had more status. And I think what was going on was that in the US, people sort of value this sense of earned status. So status can be earned in the US, where I think in Italy, it's more of a society where status is inherited. So for example, my co-author is Italian, and she's always talking about how people come from good families or not. And so there's very much this idea that your status isn't necessarily something that you earn, but you inherit. And so in that sense, working hard really wouldn't get you anywhere, whereas in America, you have the sense that you can actually climb the ladder.

And so celebrities, for example, might say, instead of saying, you know, I make one movie every year and I get to hang out on the beach for the other 10 months of the year, they actually are suggesting, oh my God, I'm so overworked.

Yeah, so we actually looked at tweets of celebrities who were tagged with this hashtag humblebrag. this idea of bragging, but sort of disguising it as a complaint. And a lot of the ones, a lot of the tweets we found had to do with being busy. So, you know, I have to be in the recording studio this morning, and then I have a book meeting in the afternoon, and then I have to travel to New York in the evening, and hashtag I have no life, you know, these kinds of tweets. You're trying to say something about yourself. You're busy. You're really important. You don't have time to do other things. And so you see that on social media, that's kind of an acceptable and effective way to show your status by telling people how busy you are.

Neeru Paharia is a marketing professor at Georgetown University. Neeru, thank you for joining me today on Hidden Brain.

Thanks for having me.

Hidden Brain is produced by Hidden Brain Media. Our audio production team includes Bridget McCarthy, Annie Murphy-Paul, Laura Quirrell, Kristen Wong, Ryan Katz, Autumn Barnes, and Andrew Chadwick. Tara Boyle is our executive producer. I'm Hidden Brain's executive editor. Our unsung hero today is Drew Daigle. Drew is a senior ad operations specialist at Stitcher. Drew recently became the person to oversee all of the coordination involved in the production process for the ads you hear on this program. It's complicated and vital We're doing vitally important work, and Drew is really helping to keep that work organized and streamlined for us. Thank you, Drew. If you like Hidden Brain, you can help us make the show by making a financial contribution. Just go to support.hiddenbrain.org. That site again is support.hiddenbrain.org. I'm Shankar Vedantam. See you soon.

Thank you.

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