Trading bishop for knight?

In this position, you'll need be7 to unpin the knight, since opening your g-file will pose a larger weakness than the opponent's by giving him doubled c-pawns. His threat supersedes yours, especially since your queenside pieces are mostly dormant and you'll have no prospect of castling. So yes, this is not a Nimzo-Indian; retreat.

All that paraphlilogy of bishops being better than knights doesn't take into account the most important factor: In the early opening phase the most important thing is fast development.

Taking the knight and following with ...d5 looks like (and IS) the best way to treat the position. The bishop pair is more than compensated by Black's better development and the slight damage of white's queenside structure.

Part of being a good player is mastering the capacity to make sound judgments of when to prefer knights and when to prefer bishops. In a lot situations the answer is quite subtle  and borders on preference.

Quite commonly you will face scenarios like the position you showed where you can take a knight for a bishop and do some pawn doubling on the side. This adds even more complexity because knowing when doubled pawns are bad or not (esp when not isolated or rook double pawns) is in itself yet another positional subtlety.  beginners and weaker class player also lose drawn pawn endgames because they dont play proper defense to compensate for a doubled pawn "weakness".

This means in practice, doubling pawns for bishop for knight trade at lower levels may be MORE advantageous despite objectively not even being best. As you get stronger the bishop starts becoming more preferred although even then, its on a case by case basis. 

In your specific position as Pfren already said, take  knight and early d5 is the way to go, BUT this is something you should have known the minute you played bb4. such a move in a position like that strongly hints you intend to take, otherwise you would have played bc5 to begin with, or be7 if feeling defensive. This is because a3 bc5?! just gives white more options  and a3 ba5?! is tempting possibilities with b4 esp since the  black knight is on c6 already (notice that in the ruy lopez, white rarely  blocks the c-pawn with his knight prematurely, part of the reason is so that the potential a6-b5 doesnt become a permanent threat in the position with b5-b4 dislodging knight possibilities.