Hotelling’s Law at Work: Cars and Twitter Hearts

If you have looked for your car recently in a big parking lot and had trouble finding it you can be forgiven. All modern cars look alike. In fact, if you photoshop the grille of one maker onto the car of another and it’s nearly impossible to tell the difference as this work by Jalopnik demonstrates


Yup. That’s a Kia with a BMW grille.

So why do I bring this up? Because yesterday Twitter announced that it was replacing the star icon with a heart for favoriting. This too seems to me driven by a desire to please a larger number of endusers. It is the same approach to design based on user feedback that has converged the modern cars to all look alike. So now we have this situation:


And yes, that’s the bottom of a tweet, not a Tumblr post.

But isn’t it good give endusers the same conventions everywhere? I am sure Twitter did a lot of testing which suggests that’s correct. And yet, just as with car design it winds up being a net loss for society by removing variance from the environment. Both the car design and Twitter’s choice are great example of Hotelling’s Law, which the prolific economist Harold Hotelling found in 1929: in many markets it is rational for competing producers to make their products more similar to each other even though this results in net loss to society.

For instance, I strongly preferred the star over the heart. I used it to mark tweets that I deem interesting and important. Many tweets that I deem interesting I don’t like and certainly don’t love. Quite often they are in fact tweets I disagree with but that are nonetheless important. The star is a value neutral highlight. The heart isn’t.

I will continue to use Twitter as will most other longtime users. On the margin Twitter will likely gain some new users from this move. And that’s exactly why Hotelling’s Law applies in so many situations. Still sucks.