Behavioural Science

The paradox of choice

Something interesting is going on which choice. It is a paradox, a concept cornered by Barry Schwartz. He describes the paradox of choice as follows: ‘Learning to choose is hard. Learning to choose, well, is harder. And learning to choose well in a world of unlimited possibilities is harder still, perhaps too hard.‘

So, what does this implicate? Is less indeed more? Well, yes and no. In most cases, too many options to choose from isn’t in our best interest. This has to do with our bounded rationality. We, as human beings, cannot make every decision in our daily lives wholly rational or, better put, with focused attention. There are too many decisions for us to deal with to do so. Just think about your morning. From the moment you heard your alarm go off, you had to decide to turn it off or snooze. You had to decide to stretch or do another roll-over on your side right into that comfy spot that has the perfect temperature; You had to decide to get up of sleep in for just a little bit longer. You had to decide to get dressed right away or get your first coffee in PJ’s first. As a matter of fact, you had to decide to have coffee indeed, or did you decide to have something else? Or did you make the decision to go pee first? I have not even begun to talk about the decision to check your phone, turn on the radio, heating or toaster yet. Or the decision to combine all of these with checking your to-dos of the day. And your day has only just started.

These examples all may seem trivial, but they’re not. It is estimated that your brain has to compute about 35.000 decision a day from minor ones to bigger ones. Your brain cannot process all of them consciously or with extensive thought; It would simply crash. Therefore, a lot of our decisions are made automatically and unconscious. As Nobel laureates Kahneman and Tversky have discovered, we have two operating systems in our brain: A deliberate and an automatic one. And the automatic one has the upper hand, which is a good thing. It simply shows our brain is wired to help us navigate as with as little effort as possible through life. Now back to too many options to choose from. Why does it work against us? 

The three reasons too many options don’t work or bounded rationality

1. First of all, having too many options causes apathy simply as it requires too much cognitive activity. This can lead to decision fatigue[i](and, for instance, depending more on defaults) or even not making any decision at all[ii]. This phenomenon is called choice paralysis (also referred to as choice deferral).
2. Secondly, when we have more options to choose from, we tend to make worse decisions as we tend to rely even more on our system one cues, and we know they can be biased[iii].
3. And finally, the more options to choose from we have, the less satisfied we are with the choice we did make. The more options, the more we feel we ‘missed out on.‘ In his book, Schwartz described an experiment in which participants could choose between six models of jeans. The experiment showed that the more choices people had, the less satisfied they were with their final choice. This matches Sheena Iyengar’s research, professor at the Columbia Business School and author of ‘The Art of Choosing’, that taught us that ‘The existence of multiple alternatives makes it easy for us to imagine alternatives that don’t exist—alternatives that combine the attractive features of the ones that do exist. And to the extent that we engage our imaginations in this way, we will be even less satisfied with the alternative we end up choosing[ii].

Just to come back to choice paralysis for a little bit. There is a cognitive bias related to this phenomenon called regret aversion. When people anticipate regret from a choice, they tend not to act at all. This can have grave consequences. A meta-analysis has shown that people’s behaviour to accept medical treatments are influenced more by avoidance of the regret of making the wrong choice than it is influenced by other kinds of anticipated negative emotions[iv]. Therefore, when designing a choice, you have to be aware that the number of options you present to someone also enhances the probability of regret, which enhances inertia. In the mentioned example, this has shown to impact behaviour concerning health seriously.

[i] https://en.wikipedia.org/wiki/Decision_fatigue

[ii] https://web.archive.org/web/20131130195656/http://www.columbia.edu/~ss957/articles/Choice_is_Demotivating.pdf

What causes choice overload

Different aspects can contribute to someone’s perception of choice overload. For example, the number of options or characteristics to choose from, time constraints, decision accountability or the number of complementary options[v]. Too many options to choose from could have a severe impact on the buying behaviour of your clients. Let me tell you about the so-called jams study. On a regular day at a local food market, people would find a display table with 24 different jams[vi]. On another day, at that same food market, people were given only six different jam choices. The effect on buying behaviour? The six choices showed a sales uplift of 1000%.

The difference between freedom of choice and reducing options

 From an ethical point of view, it is good to make a distinction between options and choice. We feel it can be a very effective Behavioural Design to help someone make better decisions by limiting an option, but you shouldn’t forbid a choice. This is the essence of nudging[i]. Let me illustrate the difference with an example. Limiting the number of options or take out some options altogether has, for example, proven to be very beneficial in helping people who are struggling with being overweight. One very effective way to fight this is to change eating habits. A lot of interventions have been developed and tested to help people change their eating patterns. From adapting food labels to more affective nudges, for example, by promoting the taste instead of a particular food’s healthiness. From a meta-analysis, aggregating data from almost 96 behavioural experiments on successfully promoting healthy eating, the most effective intervention turned out to change the plate and cup size[viii]. Taking an option (in this case, large 16 oz. cups) helped people eat less and still feel satisfied[ix]. Although you take away options with this intervention, you don’t take away the freedom of choice. People always have the choice to go for a refill or buy a second portion. Only, it turned out not many people do. By simply reducing options, you make it easier for people to change their behaviour.

Just one more argument against limiting freedom of choice (instead of options). We, as humans, are wired to want a sense of control and closely tied to this sense of control is our need for freedom and autonomy. If you do forbid a choice, you may, therefore, very well encounter adverse effects. People might start avoiding, ignoring or counterarguing. This is also why warnings backfire. We don’t like to be told what to do. It crosses our innate need for freedom. And if people are pushed into doing something, they push back. How many times did you change your mind or behaviour in your adult life because someone demanded you to do so? My parents and teachers still had that influence on me, but in daily life when we want to influence people, we need to allow for agency.

[i] https://wearesata.com/nudging/

But on the other hand, it works the other way around too, and on the more positive side of things:

Limiting the number of options can lead to more satisfying choices. 

Researchers did a meta-analysis[vii] comparing 99 scientific studies on choice overload. They found that choice reduction is most effective when:

1. When people want to make a quick and easy choice
2. When the product is complex (so fewer options help the consumer make a decision)
3. When it’s difficult to compare alternatives

4. When consumers don’t have clear preferences

Helping people choose in practice

How can you make that work for you in practice? Well, sometimes, it is a matter of framing. In other words, thinking about how you will present information to someone. Maybe you have kids, and well, most kids aren’t big on eating veggies. Mine isn’t, anyway. We, as parents, often tell our kids: ‘Eat your peas’. You’ll probably have more success if you give your kids a sense of control, designing the choice a different way. ‘Do you want to eat your peas or carrots first?’ This is a bounded choice. It can also work in our professional life. Let’s say you are in negotiation with a talent you like to attract for your team or organisation. Make sure you give them bounded choice that allows for agency. To make it more concrete: Often, negotiations come down to challenging the salary offer. Suppose you give someone the option beforehand to get awarded a higher salary and tie a condition to it; you design for a bounded choice. For example, you can have a higher salary X, but it implies X fewer days off. Your candidate still has freedom of choice, but at the same time, you prevented setting the stage for a limitless salary/bonus battle.

How far you should limit options depends on the behaviour you are designing. If you want someone to click on a button on your website, it is better to have one clear option. If you want someone to pick a health regimen, it works to have three options, with your preferred option positioned in the centre, as people tend to gravitate to the middle. If you want someone to buy a specific product, it works to show two options of which the left product (in Western countries) is a decoy that is priced much higher than your target product. This higher-priced product will act as a mental anchor that makes people feel your product is a perfect deal. You could also think about chunking. You can read about this here[i]. These are best practices from behavioural science, but it is always a matter of experimenting what works best in your situation. One thing remains the same for every situation: Less is always more when shaping decisions and behaviour. However,

You make people more capable of choosing from more options. You have to do it gradually.

A research team at a German car manufacturer ran an experiment[xii] with the manufacturer’s online car configurator. Potential clients using the configurator had to choose from 60 different options to configure their entire car. Every option again consisted of sub-options. For instance, to pick your car colour, you had 56 colours to choose from, picking your engine also four options and so on. It seemed logical to have people select an ‘easy’ option first. For example, colour is something that most people have a set preference. And then move to the ‘harder’ options like the engine. The experiment made half of the customers go through the configurator from many options (e.g., colour) to fewer options (e.g., engine type). The other half from fewer options to many options. The researchers found that they ‘lost’ the second group: They kept hitting the default button or aborted the process. The first group hung in there. They had the same information and the same number of options, only the order in which the information was presented varied.

[i] https://wearesata.com/applied-behavioural-economics-chunking/

If you start someone off easy, you can teach them how to choose.

So, if you have many options, present them from a few to more. To conclude, there is, in fact, an art to choosing. By understanding a bit more about the workings of human psychology can give you far more control over successful outcomes. You can choose to be more successful, in fact. How’s that for a change? Doesn’t it spark your sense of freedom?

Astrid Groenewegen

References:

[i] Schwartz, Barry (2004). The Paradox of Choice: Why More Is Less, Ecco.

[ii] Iyengar, S., & Lepper, M. (2000). When choice is demotivating: Can one desire too much of a good thing? Journal of Personality and Social Psychology, 79, 995-1006.

Link: https://www.researchgate.net/publication/12189991_When_Choice_is_Demotivating_Can_One_Desire_Too_Much_of_a_Good_Thing

[iii] Johnson, E. J., Shu, S. B., Dellaert, B. G.C., Fox, C. R., Goldstein, D. G., Häubl, G., Larrick, R. P., Payne, J. W., Peters, E., Schkade, D., Wansink, B., & Weber, E. U. (2012), Beyond nudges: Tools of a choice architecture, Marketing Letters, 23, 487-504.

Link: https://www.jstor.org/stable/23259227?seq=1

[iv] Brewer, N. T., DeFrank, J. T., & Gilkey, M. B. (2016). Anticipated regret and health behavior: A meta-analysis. Health Psychology, 35(11), 1264-1275.

Link: https://www.researchgate.net/publication/307949693_Anticipated_Regret_and_Health_Behavior_A_Meta-Analysis

[v] Chernev, A., Böckenholt, U., & Goodman, J. (2015). Choice overload: A conceptual review and meta-analysis. Journal of Consumer Psychology, 25(2), 333-358.

Link: https://www.researchgate.net/publication/265170803_Choice_Overload_A_Conceptual_Review_and_Meta-Analysis

[vi] Iyengar, SS and MR Lepper (2000). When choice is demotivating: can one desire too much of a good thing?  Journal of Social Psychology, 995-1006.

Link: https://www.researchgate.net/publication/12189991_When_Choice_is_Demotivating_Can_One_Desire_Too_Much_of_a_Good_Thing

[vii] Alexander Chernev, Ulf Böckenholt, Joseph Goodman (2016). Corrigendum to choice overload: A conceptual review and meta-analysis. Journal of Consumer Psychology, Volume 26, Issue 2, April 2016, Pages 333-358.

Link: https://onlinelibrary.wiley.com/doi/abs/10.1016/j.jcps.2014.08.002

[viii] Cadario, R., & Chandon, P. (2019). Which healthy eating nudges work best? A meta-analysis of

field experiments. Marketing Science.

Link: https://www.researchgate.net/publication/318420196_Which_Healthy_Eating_Nudges_Work_Best_A_Meta-Analysis_of_Field_Experiments

[ix] Thaler, R. H., & Sunstein, C. R. (2008). Nudge: Improving decisions about health, wealth, and happiness. Yale University Press.

Link: https://www.amazon.com/Nudge-Improving-Decisions-Health-Happiness/dp/0300122233

[x] Schwartz, B. (2004). The paradox of choice: Why more is less. New York: Ecco.

https://www.amazon.com/Paradox-Choice-Why-More-Less/dp/149151423X

[xi] Iyengar, Sheena (2010). The Art of Choosing: The Decisions We Make Every day – What They Say About Us and How We Can Improve Them. Hachette UK.

Link: https://www.amazon.com/Art-Choosing-Sheena-Iyengar/dp/0446504114

[xii] https://www.ted.com/talks/sheena_iyengar_how_to_make_choosing_easier