15 Apr Paradox of Choice
I just returned from vacation and for me, a really relaxing vacation involves a minimum of choices. On this vacation my options included snorkeling, swimming, sailing, reading, and not a whole lot more. It was perfect. It also got me thinking about a fascinating book by Barry Schwartz called The Paradox of Choice: Why More is Less.
Mr. Schwartz begins by discussing the idea that America was founded on a commitment to individual freedom and autonomy, and that one way to maximize individual freedom is to maximize choice. However, his premise is that modern Americans are feeling less and less satisfied, even as their freedom of choice has expanded.
If you think about it, the number of options we have for so many things is amazing. When Mr. Schwartz went to his local grocery store, he found 285 varieties of cookies, 116 kinds of skin cream, 22 types of frozen waffles, etc. etc. etc. Now maybe in the grocery store this isn’t so bad, but how many of us have been overwhelmed when faced with choices of cell phone plans, health care plans, and life insurance options? It seems as if there are almost an unlimited number of varieties. As a result, people get overwhelmed because they need to continuously make choices and decisions.
Mr. Schwartz found that all this choice has several negative effects on people. First, it produces paralysis, rather than liberation. With so many choices, people find it difficult to choose at all, so they don’t. For example, Sheena Iyengar, PhD, a management professor at Columbia University Business School, and Wei Jiang, PhD, a finance professor at Columbia Business School, analyzed retirement-fund choices among 800,000 employees at 647 companies. They found that when given two choices, 75% participated in the retirement funds, but when given 59 choices, only 60% did.
In addition, when people successfully overcome their paralysis and choose, they tend to be less satisfied if they had a lot of options than they would have been had they had fewer options. Mr. Schwartz posits that this is because the more options people have, the more missed opportunities they also have. For example, if you have five job offers, all of which are somewhat different and have something to recommend them (in your favorite city vs. working for someone you really admire vs. more money vs. more opportunity for advancement vs. more creative work), then once you accept one, you are rejecting the good parts of the other four. As a result, it is easy to imagine that you could have made a different choice that would have been better. Thus the more options, the more regret.
More options also cause your expectations to escalate, which further decreases your satisfaction. Mr. Schwartz discusses the fact that for years there was basically one style of blue jeans. They weren’t great, they weren’t that comfortable, and that was pretty much all there was. But then one day he went to the Gap, which, as anyone who has ever shopped there knows, has a huge variety of blue jean styles. He bought a pair that fit better than his old ones, but he actually felt worse about his purchase because the array of options caused his expectations to rise. With only one choice, he had no expectation that his jeans would fit well and look good. However, adding options increased his expectation that he would find the “perfect” pair. But since no one pair was absolutely perfect, he was ultimately less satisfied with his decision.
Furthermore, all those options cause people to blame themselves when things are not perfect. If you buy an uncomfortable pair of jeans because there is only one choice, then it is not your fault. But if you have dozens of options, then you will blame yourself if you don’t choose the best pair. So not only do you end up less satisfied with your decision, but you are also unhappy with yourself, because you were not able to make the “best” decision.
Ultimately, Barry Schwartz’s point is that some choice is better than none. However, there comes a point when more choice is not better than some choice. He has some interesting thoughts on how to handle all the choices so that people can block out unnecessary options while making use of the ones that are important to them, but that is the topic of a later newsletter.
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