Three weeks ago I wrote a blog post about Boeing and Airbus as an example of a duopoly market. The recent Boeing 737 crashes were a hot topic at the time, breaking out of the realm of news for airplane nerds such as myself, and into the realm of mainstream news. During the time when that article was written, it looked like Boeing might be in serious trouble because consumers were beginning to switch flights to planes besides the Boeing 737. Consumers had gained information and acted on it.
In my article I included that virtually every relevant country except the US had grounded att 737 Max 8 planes (a very large proportion of the planes in service around the world). After I wrote my article, the FAA in the United States grounded all 737 Max 8 planes as well, pending an investigation into their safety.
Also since the writing of my previous article, several airline companies and the US air force have suspended their orders of Boeing 737 planes, costing Boeing $1.8 billing in revenue so far. While Boeing has announced that they are working on software updates to increase the safety of their planes, so far the company has not released anything and has not provided a date that such a software update might be released.
After this much time, the attention of the media has shifted to other topics, such as Brexit, the US-Mexico border, and Health Care. The attention span of the people of earth is very short, so while I originally posted that this event might become an example of a serious disruption in a duopoly market, this event instead became an excellent example of the short attention span of consumers. Because the rapid news cycle, consumers no longer care about any one economic topic for any long amount of time.
This is interesting, because in all of my economics classes I’ve been taught that one of the powerful forces coming to make an impact on economics is the steady increase of perfect information. But, it seems as though consumers become so easily distracted from events that might impact their decision making (in this case, what airplanes they are comfortable flying on), that I am beginning to discount the idea that more information at the disposal of consumers will increase their ability to make correct decisions and maximize their utility given their budget constraints. In fact, the clickbait-focused nature of modern news might even decrease how informed consumers are.
One result of the current overly fast and undetailed news cycle is the easy spreading of false information and the easy distraction of consumers from negative aspects of a company or product. So, consumers may in fact make worse decisions, believing that they are better informed.
Overly simplified or untrue news show no signs of slowing down, so consumers who simply forget to care about things that truly might matter to them, such as whether or not their plane will fall out of the sky, might be a problem that just grows and grows.