Akst: Fancy labels aren't worth what we pay

Here is an experiment you are guaranteed to love. Researchers asked top-notch violinists at an international competition to play some instruments and judge their quality. But the violinists' vision was obscured, so they couldn't see which violin was a 300-year-old Stradivarius worth millions and which were just good contemporary instruments.

Thrillingly, the experts thought they could tell them apart by playing but really had no idea. In fact, the Strad was their least preferred instrument. These results are consistent with findings about wine. In blind tastings, experts and consumers alike are for the most part unable to distinguish expensive wines from cheap ones. Wine specialists, moreover, have repeatedly shown that their judgments are susceptible to what they've been told about a wine's price.

I love these studies, don't you? They make the experts look like bozos, after all, and they make me feel better about being a cheapskate. There's nothing more uplifting than the sight of a naked emperor revealed in all his foolish glory.

But let's not get carried away. A musician I know has a viola appraised a few years back at $40,000, and another valued at $400,000. When she played them both for me to see if I could appreciate the difference, I was skeptical, but it turned out that I could. The costlier, older instrument had a richer sound. But the difference wasn't huge, and the cost of this relatively modest improvement (to my tin ear) was staggering.

My friend is a world-class musician who can justify the expense. Besides, scarce old instruments -- hers is from 1680 -- have been good investments over the past 30 years, so ultimately she'll probably come out ahead.

Yet I can't stop focusing on what a small gain was purchased at 10 times the expense. Too often we allow ourselves to be tyrannized by what Freud called "the narcissism of small differences," which either don't exist or aren't large enough to justify their great cost.

This applies to much of what we buy. We might be happier not obsessing as much over which is the very best pair of earbuds or which luxury car has a few more horsepower. In fact, hunting restlessly for the very best of anything, including the absolutely optimal cup of coffee, violin or even spouse, is usually a terrible idea. This behavior is known in the social sciences as "maximizing," and researchers have shown that it's a great way to make yourself miserable. Much better to find something that's quite good enough and call it a day.

It's also much cheaper. Leaving aside the cost of searching, most things are subject to the 80-20 rule, which states roughly that 20 percent of inputs account for 80 percent of outputs. In other words, beyond a certain point, a relatively small improvement in anything will cost you way too much.

You can make a lot of hay by embracing this rule, which comes to us from an economist named Vilfredo Pareto. In business, for example, you'd eliminate product lines that produce only 20 percent of profits yet consume 80 percent of your effort. And you'd shoo away customers who take up 80 percent of your time in exchange for just 20 percent of sales.

I find the 80-20 rule quite comforting, in that it suggests there's no need for great wealth, just as I find the recent violin study quite comforting, for it implies that violinists needn't worry if they can't afford a Stradivarius.

My friend, incidentally, is skeptical of the study, arguing that a violin may sound one way to a player "under the ear," but quite another to the audience in a concert hall. Maybe. But the more important question is whether the difference even matters.

Daniel Akst is a member of the Newsday editorial board.