Tradeoffs

Synopsis: Trade-offs exist, but people like to ignore them.

It's tempting to ignore trade-offs. A group of us made a music video to the song "Africa" by the band Toto. My friend has wanted to do so for a long time, and we finally helped him satisfy the urge. The video turned out relatively well considering our low-end equipment and knowledge. I did the editing for the video, and once finished, wanted to share it.

It turns out there is a fair bit of knowledge necessary to get a video from an editing program like Final Cut (the one I used) to the Internet or onto a DVD. I had done this before, but forgot about the trade-offs. The trade-off involved is usually quality vs. convenience. Small files are faster to encode and easy to send via the Internet but usually look worse.

In economics, the phrase 'perfect information' means essentially that the people in a market know the trade-offs of the choices they make. Information is important for a market to work well. Businesses need to know the trade-offs just as consumers do, to decide how to price, and what and how much to stock.

The job of a salesperson, despite being often disguised as "to proliferate information," is to distort trade-offs. A truly good salesperson succeeds in instilling lasting confidence in the consumer about the transaction. The interesting thing to me is that so many customers allow the confidence to be instilled, at the cost of money, sometimes a lot of it.

Salespeople sometimes use deceit to distort trade-offs. The incentives to lie can be powerful. Why do people listen to salespeople? Stepping away from economics, it's probably because of the desire to ignore tradeoffs. My dad once told me it's unhealthy to fantasize, because it can make reality disappointing. It would, after all, be nice if those emails claiming to have $1,000,000 for you were true. As obvious as they are though, enough people fall for the ruse to make it worth doing. I overheard my uncle Daren theorize that people give into greed so much that they become stupid.

Maybe greed, maybe laziness? Maybe lying salespeople? The desire to ignore trade-offs is strong, and can be very costly. I finally decided give up quality to share the music video.

Update 7/10/2010: Youtube allows larger file sizes for upload than the hosting site for this blog. The higher quality video may be embedded into the blog. Third parties can ease choices about trade-offs. (This version also has a credits/bloopers video, which is probably more interesting to the group who made it than to anyone else.)

P.S. In case anyone wonders, "Four Very Different Looking Guys" has no real significance.