Archive for the ‘Behavioral economics’ Category

New in the Journal of Wine Economics: my book review of Parker’s Wine Bargains

Wednesday, October 13th, 2010

Released today in the new issue of the Journal of Wine Economics is my review of Robert M. Parker, Jr.’s Parker’s Wine Bargains: The World’s Greatest Wine Values Under $25 (Simon & Schuster).

The full text of my review is available for free (PDF; begins on p. 209). I also encourage you to subscribe to the JWE to get the full text of all other JWE articles.

Here’s an excerpt from my piece:

…Even if the exaggerated style of winemaking championed by the critic Robert M. Parker, Jr., has fallen out of fashion amongst wine geeks these days, there are a hundred legacies that will endure for generations beyond the particulars of the man’s palate: his points.

Robert Parker was not the first wine critic to employ a 100-point scale, but it was he that etched the paradigm of attaching numbers to wine into the collective consciousness of the gustatory media. Parker’s leading competitors in America—Stephen Tanzer, Wine Spectator, Wine & Spirits, Wine Enthusiast—all currently use 100-point rating scales. Even the divergent foreign competition now gravitates toward other functionally numerical forms of secondary-school-test-mark mimicry: letter grades from A to F, points out of 10 or 20, glasses out of three, stars out of five.

If attaching numbers to wine turns out to be Parker’s main legacy, it’s a major one. A few decades ago, the wine writer’s primary role was merely to describe wines. But the purpose of the wine writer after Parker is to quantify their quality. The few prominent modern wine critics whose reviews don’t revolve around numerical ratings are in the minority, and they tend to be interpreted by some observers as an anti-Parker faction—even when they have no intention to be. You know that a framework has become canonical when anything in the field that doesn’t adopt it is understood as an attempt to refute it.

Canonization can have a stifling effect on the developing talent in the enterprise of writing. The literary scholar Harold Bloom has suggested that the canon can be a paralyzing force in the lives of up-and-coming poets, who struggle with the task of differentiating themselves from the same voices that inspired them to pursue poetry. Read too much, in other words, and you might convince yourself that there’s nothing new to write. The novelist Benjamin Kunkel, asked by London’s Observer whether he was influenced by the more famous novelist Dave Eggers, expressed that tension in a way that will be familiar to many writers: “Everyone I know has read him, but I don’t read very much contemporary fiction. I wanted very much to create my own sound, and I didn’t want to feel that I was either running to meet him or deliberately running away from him.”

Not reading Eggers is a choice that any fiction writer can make. But not reading Parker is hardly an option for the modern wine writer: the shelves of most upmarket wine stores are strewn with past and present Wine Advocate shelf-talkers, which function like permanent retrospective installations of Parker’s work. So we have no choice but to engage, and in so doing, we often divide: into those who run to meet Parker, perhaps with deference to Jacques Chirac and decades’ worth of popular wisdom from industry veterans; and the increasing numbers that run away from him, perhaps with complaints of global convergence on a big, oaky, high-alcohol style of winemaking, the marginalization of terroir, and maybe just a tinge of jealousy toward the man who made millions tasting wine.

If contemporary critics are split on the merits of Parker’s exaggerated palate, though, their revealed behavior of replication shows there to be supermajority support for his points methodology. Parker points were first imagined, in the spirit of Ralph Nader, as the guerilla ammunition for the consumers camping out in the vineyards, their last line of defense against wine bullshit. The funny thing is that the vision of independence from producers that originally inspired Wine Advocate seems to have been completely lost on the modern copycat magazines (more…)

“Recent Advances in Bullshit Reduction” at the International Food Blogger Conference

Friday, August 27th, 2010

My talk at the International Food Blogger Conference in Seattle, “Recent Advances in Bullshit Reduction,” along with my panel session and discussion/debate with Robert Schroeder of the Federal Trade Commission and Foodista.com CEO Barnaby Dorfman about the new FTC guide to the disclosure of freebies and financial relationships in blog reviews, will be broadcast live on UStream at 3pm Pacific time. was scheduled for streaming video, but the video had technical problems and dropped out in the middle of my panel session, so for those who are interested, I’ve posted the PowerPoint presentation (with images downsampled) here. If you’re interested, you can also check out the original Osteria L’Intrepido post, my followup to Wine Spectator’s response, and a few other related entries on my blog.

Vote yes on Prop 19, and help start a new conversation about America’s violent War on Drugs

Monday, August 2nd, 2010

If you’re registered in California, I encourage you to go out today and vote yes on Proposition 19, which will legalize, tax, and regulate cannabis—and take a major step toward treating drug use as a public health issue instead of a crime in America. It is time to end the failed policy of marijuana prohibition that has turned millions of otherwise law-abiding citizens into convicted criminals for smoking pot.

The U.S. has less than 5% of the world’s population, yet we have a quarter of the world’s prisoners. Since the declaration of the “War on Drugs” in the 1970s, the U.S. prison population has more than quadrupled. More than 1.5 million Americans are now arrested each year for nonviolent drug offenses, and more than 500,000 of them are imprisoned.

To date, the War on Drugs has killed more than 30,000 Mexicans, made our borders less safe, ruined the lives of millions of American families, wasted hundreds of billions of dollars of taxpayer money, and created the world’s largest prison population. The marijuana prohibition alone costs (by one estimate) more than $40 billion per year—yet it hasn’t achieved its stated goals of reducing marijuana use. Instead, it has created a black market that has turned the pot trade into a lucrative, tax-free industry dominated by organized crime (especially in Mexico, where half the trade is in marijuana) and plagued by the dangers of impure, unregulated drugs. And it stuffs our crowded, enormously expensive prisons with nonviolent pot offenders that don’t belong there. (more…)

Counterfeit wine below the radar: the case of Tesco

Wednesday, July 7th, 2010

Britain’s Sun recently reported that supermarket giant Tesco sold two bottles of counterfeit Louis Jadot Pouilly-Fuissé, distributed by Hatch Mansfield, to a customer named Danny McGowan of Clacton, Essex, who described the fake bottle as having a label that “looked photocopied.” Apparently, the bottle was on sale for £5, down from a usual £14.49. (As of this writing, the Pouilly-Fuissé was on the price list at the Tesco website for £12.99.)

The Sun article, which was sent my way by the illustrious wine-counterfeiting scholar/economist Günter Schamel (whose work I’ve previously discussed here), has the amusing title “You Plonkers” and an equally amusing photo of a nonplussed McGowan.

The most unusual thing about this story is that while has been much discussion of counterfeit wine in the high-end rare and fine wine market—Jefferson bottles and first-growth Bordeaux and such—there hasn’t been nearly as much talk about counterfeiting in the low-to-midrange wine market.

In that market, the trick might be a lot easier to get away with, for at least three reasons: first of all, (more…)

FIFA.com censoring discussion of referee Koman Coulibaly’s nullification of USA goal vs. Slovenia in World Cup

Friday, June 18th, 2010

As of this writing, of the 343 comments to have been approved by the moderators on FIFA.com’s “Have Your Say” discussion board about today’s controversial US-Slovenia 2-2 draw in World Cup competition, not one of them contains even a passing mention of the main topic of discussion of every article that has been written about the game: the fact that referee Koman Coulibaly disallowed the third US goal for reasons that weren’t (and still aren’t) clear to players, fans, or television announcers.

Other soccer discussion boards, like the Washington Post’s Soccer Insider, were flooded with debate and discussion about the questionable call, which began almost immediately after it happened at about 16:40 GMT (the time zone used by FIFA.com). So were Twitter feeds (although at some point Twitter crashed, as it frequently has during the World Cup). The discussion over the controversy really exploded around the internet after the game ended at 16:51, and before long, USA’s tie with Slovenia already had more Google News blog hits (850) than Serbia’s upset of Germany (701).

But on FIFA.com, the silence about USA-Slovenia has been deafening. The latest comment to appear on the discussion board has a timestamp of 20:04. In the 193-minute span between the game’s end and the latest comment’s time stamp, only 24 squeaky-clean comments have been approved. For instance: “great fightback by the USA”; “this is the right result on the balance of play”; “way to go USA”; “the match was really exciting!”; “slovenia is the best team”; “USA are becoming a real nice team!”; and “Slovenia had a great chance to qualify in the next round!! But in the second half we were too defensive.”

By comparison, in that same span of time—193 minutes—after the end of Germany-Serbia (which ended today at 14:20), there were already 175 comments posted. That’s more than seven times as many.

At one point, a user named Rossus, from South Africa, posted one comment that did, in the most polite possible way, at least hint at the idea that there might have been some controversy. Rather than suggesting any human fault, Rossus’s comment merely used the word “luck”: “I am not a USA supporter but the USA was very unlucky not to win.” But even that comment, after briefly appearing on the match overview page (which streams the latest comments), was later censored, and never made it to the discussion board page itself. The comment is no longer on the site, but I took a screen shot of it during the brief time that it appeared on the overview page, which appears here to the left.

Just to test my theory personally, I also tried posting the following comment: (more…)

The Beer Trials: a sneak preview

Monday, April 12th, 2010

Here’s a sneak preview of The Beer Trials, which I co-authored with Seamus Campbell. The preview (in PDF format) includes a press release, the preface, our list of beer ratings, and a few reviews from the book.

The book, due out on April 15 from Fearless Critic Media (distributed by Workman Publishing), rates and reviews 250 of the world’s most prominent beers (craft brews, macro-lagers, and everything in between), based on blind tastings by a panel of brewers and experts in the beer mecca of Portland, Oregon—Seamus’ hometown. We also include a broad and (hopefully) accessible reference guide to the world’s major beer styles, flavors, and regions.

The collaboration was, I must admit, a bit lopsided: Seamus (who is a brewer and one of the world’s 96 Certified Cicerones) did the lion’s share of the work. I contributed the “Trials” concept (building on the ideas set forth in The Wine Trials) and co-wrote the first few chapters, which discuss the effects of behavioral marketing, perceptual bias, and the placebo effect on the beer industry.

In Portland, Seamus and I also conducted a beer experiment together in which we tested people’s ability (or, um, lack thereof) to discriminate (more…)

When are high wine prices justified?

Saturday, February 13th, 2010

In wake of some of the latest chatter about The Wine Trials 2010 (this one from Joe Briand, wine buyer for New Orleans’ excellent Link Restaurant Group, e.g. Cochon, Herbsaint, with a response from Wine Spectator executive editor Thomas Matthews), I thought it was time for a quick clarification of first principles here.

Wine-Trials-2010-lrPeople have sometimes (often, maybe) misinterpreted The Wine Trials (and The Wine Trials 2010) as making the claim that no expensive wines are worth the money, or that cheap wine is generally “better” than expensive wine. In fact, I make neither one of those claims in the book.

Rather, my basic points are these:

(1) Evidence has shown that most everyday wine drinkers (not wine professionals) don’t prefer more expensive wines to cheaper wines in blind tastings. This is separate from the question of whether the properties of expensive wines are aesthetically superior in the minds of experts.

(2) Many (but certainly not all) expensive wines, such as the luxury brands from LVMH—which are advertised much like the group’s TAG Heuer watches, De Beers diamonds, Guerlain perfume, or Louis Vuitton handbags—are overpriced because such a large portion of their cost base is spent on marketing. This doesn’t just go for superpremium wines like LVMH’s Château d’Yquem, Krug, and Dom Pérignon; it also goes for brands like Cloudy Bay, a straightforward New Zealand Sauvignon Blanc whose price—without any apparent change in the production method—rose from about $15 per bottle to about $30 per bottle after LVMH acquired the brand in 2003 and began marketing Cloudy Bay as a luxury product.  To me, when the consumer dollar is going more toward advertising than toward materials or production, it’s a paradigm case of overpricing. It bothers me that the mainstream wine media doesn’t take brands to task for this. (more…)

New study suggests that Wine Spectator advertisers get higher ratings

Thursday, December 10th, 2009

The lead paper in the new issue of the Journal of Wine Economics is a study by Jonathan Reuter arguing that Wine Spectator wine ratings for advertisers were about one point higher than ratings for non-advertisers, when controlled against ratings from Wine Advocate. This is in spite of the magazine’s stated policy of tasting wines completely blind.

This from the abstract:

“In markets for experience goods, publications exist to help consumers decide which products to purchase. However, in most cases these publications accept advertising from the very firms whose products they review, raising the possibility that they bias product reviews to favor advertisers…Although the average Wine Spectator ratings earned by advertisers and non-advertisers are similar, I find that advertisers earn just less than one point higher Wine Spectator ratings than non-advertisers when I use Wine Advocate ratings to adjust for differences in quality.”

These are wine ratings, not the restaurant Awards of Excellence, which I’ve written about in the past (more…)

Bicycle inflation in paradise?

Friday, August 14th, 2009

IMG_0633.JPGPortland, Oregon, the current darling of America’s food and environmental writers, is arguably the county’s most bicycle-obsessed city. Bike use was up 28% in Portland between 2007 and 2008, and on the Hawthorne Bridge, a main thoroughfare, bikes now make up 20% of all vehicles. The New York Times estimated in 2007 that there were 125 bike-related businesses in Portland employing 600 to 800 people. There’s even a store in the city that sells only tricycles.

When I arrived in Portland last month, the first thing I wanted to do was buy a bike and get around the way the locals do. Since I wouldn’t be in town for too long, and it wasn’t clear that I’d be able to take the bike with me when I left, I wanted something extremely cheap.

There were bike shops on every other corner in Southeast Portland, the sort of Brooklyn-ish neighborhood where I was staying. I walked into what looked like the grungiest of them—a store that sold mostly used bikes. There was one employee, and he was heavily tattooed and seemed pretty cool. I completely leveled with him (more…)

Do taste and smell adjectives signal value, or do they create it?

Thursday, July 2nd, 2009

We may disagree about our favorite artists and musicians, but it’s relatively easy to agree that a particular color is blue, or that a particular note is C-sharp. They’re described by wavelengths and frequencies along a clearly defined spectrum. That’s why the technologies of visual and auditory reproduction—photo, video, audio—work so well, relatively speaking.

Worth a thousand words?

Worth a thousand words?

With taste and smell—the so-called “chemical” senses, which are more complex (humans have about 400 different types of olfactory receptors) and less well understood than the others, we don’t have the luxury of those points of reference. That’s why we so often resort to loose analogies—“tastes like chicken”—and it’s also why reproducing tastes and smells is so difficult (grape soda doesn’t taste much like grapes, and nobody’s yet synthesized a bottle of 1945 Pétrus—an activity that would surely yield tremendous profit).

To challenge this barrier, we resort to analogy. Coffee tastes like nuts and chocolate; Sauvignon Blanc smells like grapefruit and cat pee. In a Sauternes, you might sense the brine of the first green olive you tasted in Italy; in a Pedro Ximénez sherry, the viscous maple syrup that your grandmother once drizzled on your pancakes.

But how carefully are we really choosing these adjectives and analogies? (more…)