Standardizing Garbage – The Problem of Adverse Selection

$1 chicken sandwiches, there are no secrets here

$1 chicken sandwiches, there are no secrets here

The next McDonald’s marketing campaign should be,”Guaranteed: The same shitty food that makes you fat and crap customer service Nationwide!”

There is nothing like a local burger, the local coffee shop can be exceptional. The problem is, you have to take risk to go- consumers have a known quantity in the chain restaurant or box store.

Customers keep going back to chains because they know what is coming.

Here is the rub, we [customers] might know the food is terrible [McDonalds] but we drive past the local place in order to avoid the surprise – be it good or bad.

It’s an abusive relationship.

As frustrating as this is, don’t blame yourself- it is a real theory of economics.  Adverse selection refers to a market process in which undesired results occur when buyers and sellers have asymmetric information (access to different information).  The crappy products or services are more likely to be selected- I’m over simplifying but you get it.

Next time you’re tempted to stop at McDonalds or go to Crapmart just because you know what you’re going to get, roll the dice and be surprised.

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