Economic models assume consumers choose the bundle of goods that will maximize their utility. It’s no secret that this assumption holds very little water –that consumers fail to make utility maximizing choices in their day to day lives– and it can be interesting to look at examples of these failures of decision making. One interesting example of consumers incorrectly maximizing their utility is lemming decision making. Lemming decision making is essentially what happens when someone does something incorrectly just because everyone else is also doing that thing incorrectly, without actually evaluating the various outcomes and making a real decision about what to do (this behavioural failure is named after lemmings, which are small rodents that are sometimes depicted in media to commit mass suicide by running off a cliff as an entire group, after a few lemmings in the front of the group mistakenly run off the cliff).
Take for example a crowded escalator exiting a subway. All around the world, the convention on escalators is to stand on the right and walk on the left. Standing on the right and walking on the left is simply something everyone does; people assume it is the right thing to do because everyone else is doing it, but this is actually an example of lemming decision making. The most efficient way for a crowded escalator to move the most people in the shortest amount of time is actually if no one walks and everyone stands on it.
Usually, standing people will arrange themselves on a crowded escalator by standing one person per stair, standing right next to each other. But, people are not willing to walk directly behind one another. This means that people walking up an escalator generally take up three or more stairs of space instead of just one stair while they move. But, a traveler walking up an escalator will not reach the top three times faster than a traveler who stands on the escalator. In fact, because of the small amount of speed gained by walking up an escalator combined with the large amount of extra space it takes up, if everyone were to walk up the escalator it would actually move less people than if everyone stood. So, while the walking people do reach the top quicker, the escalator could better maximize its utility if everyone stood on it, because it would use all of the space available on the escalator and move way more people in the same amount of time.
In this way, consumers fall victim to lemming decision making and slow down their commutes by using escalators improperly. It’s a simple prisoner’s dilemma where if everyone took the individually slower route of standing, the group would have higher utility, but people are incentivised to cheat on this hypothetical agreement and walk. This is a fairly inconsequential wrong decision to make but, lemming decision making is also responsible for important macro utility maximization failures, like everyone selling their stocks during a stock market crash, or refusing to adopt superior electric car technology quickly enough.
Be a good consumer, and consider standing on the escalator.