In a recent email exchange between myself and Professor Palmer, he described an example he uses in an intermediate Micro class when he teaches the topic of perfect substitutes (two goods that do exactly the same thing for you). John uses two different brands of beers as his example. How do you choose when faced with two goods that you think are perfect substitutes?
I just faced that question about an hour ago. I arrived in Columbia and stopped off at my favorite brewpub to have a beer and, more importantly, use their wireless internet. They currently have a lucky 13 beers on tap, none of which taste anything like North American lagers. Some I would not touch. But I narrowed down my choices to three: their Oktoberfest, their Belgian Wit, and their Schwartzbier. I tested all three and narrowed the choice down to the Oktoberfest and the Schwartzbier (the Wit was too light for the fall weather today). Both were priced the same. How did I choose?