Thursday, April 21, 2011

Behavioral Economics and Gastrocrats

Grant AchatzJosh Ozersky calls out the "gastrocrats" who he believes are responsible for $3000 dinner reservations to Grant Achatz's Next appearing on Craigslist. Just the latest skirmish in the war between people who appreciate good food and people who consider appreciation of good food to be a status symbol to be proudly displayed. His basic point is not that high end restaurants aren't worth visiting... quite the opposite... he believes that since an  army of highly trained chefs can create things you could never dream of doing in your home kitchen, a pilgrimage to any of these "temples of gastronomy" is a wonderful experience... but  that people who don't really appreciate the food... only the bragging rights of eating at The Hot Restaurant of the Moment... are making it impossible for anyone without oodles of money or the right industry connections to ever experience it.

This, of course, relates to the IAAEB/Foodies=Gluttons themes I've posted about before... but I actually wanted to touch on the economics side of this phenomenon, based on a great Felix Salmon article on why we seem to love bad service. There appear to be two factors, the first is what was highlighted by Ozersky, and relates to status... and why somebody might actually pay $3000 to go to Next:
These restaurants have perfected the art of creating Veblen goods — items where demand increases as the price goes up. In this rarefied world, high prices are a feature, not a bug; they're status symbols that alert others to the fact that the patrons can pay $26 for something as basic as a spinach salad. They also serve to keep out the riff-raff. If L'Ami Louis cut its prices so that they were commensurate with the quality of the food and service, no one would go there anymore
So bidding up the cost of a reservation to Next is almost self-justifying. For some, evidence of the price they were capable of paying for that exclusive golden ticket is worth more than the meal itself. However, there is another, more interesting, aspect of this phenomenon which relates to the behavioral economics of our relationship with expensive restaurants:
The more you invest into something, the more you tend to get out of it. That's why expensive wine tastes better than cheap wine, even if you would have preferred the cheaper wine in a blind tasting. A $79 foie gras appetizer in Paris tastes that much better for being expensive. And once you've waited an hour and half just to be seated in a restaurant, you're going to be more excited to eat its food — not to mention hungrier.

Even when you're aware of the phenomenon, you can't escape it. One of the best meals I've eaten in the past year was at Vij's in Vancouver, a spectacular Indian restaurant with a no-reservations policy and a permanently long wait to get in. Would I have appreciated the meal as much if I'd been able to saunter into a half-empty restaurant and get served immediately? Quite possibly not. The quality of the food more than justified the two hours I invested waiting for a table. But at the same time, the two hours I invested waiting for a table probably also improved the perceived quality of the food.
Like it or not, scarcity simply makes things taste better. Are the $16 a pound tarbais beans (from France!) I get for cassoulet really so superior to the great northern beans I can easily find in any Supermarket? Or does the fact that I have to order them on the internet for a ridiculous amount of money make them taste so much creamier? Is the elusive black truffle of France so divine as to be clearly worth paying $500 a pound? Or is it the price that makes eating them so transcendent?

It's a bit of both I imagine, but anytime somebody tells you that something that is hard and/or expensive to gain access to is The Best Thing Evah... there is some reason for skepticism. Or perhaps we should just embrace the fact that a $400 anniversary dinner is simply going to taste that much better because we can only afford to do it once a year?

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