In a world that seems to be filled with endless options, we often find ourselves standing at the crossroads of choice. The paradox of choice presents us with freedom, but also uncertainty. Sometimes a lot of uncertainty! The concept of the paradox of choice is a fascinating one that influences a lot around us, sometimes in surprising ways.
So, what is it exactly?
The concept, Paradox of Choice, was popularized by Barry Schwartz, an American psychologist, who published a book in 2004 of the same name, “The Paradox of Choice: Why More is Less.”
Barry Schwartz asserted that “it seems a simple matter of logic that if people have more options in a choice domain (cereals in the grocery, shirts in the department store, mutual funds in the financial market…), they’re better off… Adding options is what economists call a “Pareto improvement,” making some people better off while making nobody worse off.” A Pareto improvement is an economic term that indicates when an improvement or change in the allocation of goods does no harm to anyone and benefits at least one person.
But he further explained, “Because of the “obvious” truth of the proposition that more choice makes us better off, it was big news when Sheena Iyengar published a series of studies more than a decade ago showing the opposite. Iyengar found that there are circumstances in which adding options reduces the likelihood that people will select any, whether the decision in question is trivial (gourmet jam) or very significant (401k participation).”
Schwartz says that choosing well “is especially difficult for those determined to make only the best choices, individuals I refer to as “maximizers.” We might call it that terrible feeling of analysis paralysis.
So, why is this even a big deal?
Some believe it’s becoming a greater concern simply because our choices in the world have grown exponentially. With so many options constantly available to us, we are finding ourselves often frozen in perpetual analysis with no decision ever made. Schwartz summarizes this conundrum, saying, “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.”
Decision-making is a process that results from the communication between the prefrontal cortex (working memory) and the hippocampus (your long-term memory), but this process is still being studied and much is still not known. Because of the complexity of the systems involved, it is understood that on a given day, your decisions may be different than on another day. This is due to differences in your emotional state, events of your day, and even how much rest you had the night before.
In 2021 Forbes Magazine wrote an article about the paradox with regard to online e-commerce selling. Matthew Stafford is the CMO of Build Grow Scale, an e-commerce education company, and his advice to sellers is often to sell less. “Simply reducing the available selection that potential customers are able to buy could increase the likelihood that they will buy,” he summarized. Because beyond a certain number of options, the result is actually negative for the customer.
As with everything, there are dissenting opinions! The Atlantic, for example, penned an article called, “More is More: Why the Paradox of Choice Might Be a Myth.” In the article, Derek Thompson wrote, “You might call it “feeling overwhelmed by options.’ But some economists are calling it something else: ‘complete hogwash.’ “He asserts that the paradox of choice assumes too much simplicity in praxis and too many similar options. When confronted with limited choice, a customer may experience a “take-it-or-leave-it” feeling that makes them “more interested in searching for comparisons.”
So, maybe the answer is somewhere in the middle?
According to Natural Human Behavior, a research journal, somewhere “between 8 and 15” is the sweet spot for the number of choices people need to make a decision. Obviously, this is related to the decision being made. Ice cream flavors at the ice cream shop will inevitably have a different number of choices than the 401k plans at your new job. The study concludes that “depending on the perceived reward, the difficulty of evaluating the options, and the person’s individual characteristics” all play an important part in the decision-making process.
Next time you’re having a hard time making a decision, realize that maybe you’re just dealing with too many choices. Go back to the basics and ask yourself what you really want to achieve with the choice you’re about to make. Maybe that will help you narrow it down.
References:
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https://psycnet.apa.org/record/2004-13971-000, Schwartz, B. (2004). The paradox of choice: Why more is less. HarperCollins Publishers.
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