Why do we flock to overcrowded tourist traps? Because of rational choice, that’s why
I am in Edinburgh at the festival, where even Jeremy Corbyn has appeared. Disappointingly, he was not playing the role of Carmela Soprano, the mafia don’s wife who is always present but never involved.
Visiting Edinburgh in the height of summer has brought home directly the problem of tourist overload. This tendency of tourists to flock to certain places, while neglecting most others, raises questions for the economic theory of rational consumer choice.
Take the Isle of Skye – it’s very attractive, but so are other Scottish islands. Or the Piazza San Marco in Venice – it’s stunning, but so are the cathedral squares in other Italian cities.
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From a rational choice perspective, it seems hard to account for the fact that visitor numbers at these places are so much greater than their competitors.
The theory – which assumes that we base decisions on logical calculations in order to make the most of a situation – does help to explain why tourists would choose to visit places that require less time and effort to get there. For instance, Skye has a bridge, whereas islands like Mull involve travelling via ferry.
But the rational choice framework appears to struggle to explain the massive concentrations of tourist numbers at particular locations.
When visiting Skye, my wife and I decided to escape the crowds by driving down Glen Brittle – an austere and bleak glen which finishes at a dead end.
I was astonished. A few miles along, the single-track road was virtually blocked by hundreds of vehicles, both on the road and balanced precariously on the boggy verges.
The attraction was the Fairy Pools, a series of small pools and waterfalls in one of the many streams which flow down from the hills.
Now, there are hundreds of such waterfalls in the Highlands, many of which are more dramatic. From a rational perspective, there seems to be no basis for the massive popularity of the Fairy Pools.
But Sushil Bikhchandani and colleagues from the University of California published a paper in the top ranked Journal of Political Economy way back in 1992. The specific purpose was to account for “herding” behaviour within the framework of rational choice. Or, as the authors put it, to identify when it is optimal for an individual to follow the behaviour of others without regard to his or her own information.
In their model, an individual has both private and public information and assigns weights to the two when making a choice. A new piece of information arrives, and the weights are updated.
When you read on the internet that the Fairy Pools are fantastic, you increase the weight on the public information which you have.
It is easy to see how, in such circumstance, certain things can become incredibly popular. They are not necessarily popular on account of their inherent characteristics – it’s their existing popularity that makes them more popular.
It was consoling, as we pondered how to escape the massive traffic jam in remote Glen Brittle, that rational choice theory is indeed able to explain the phenomenon.
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