Is the Paradox of Choice Not So Paradoxical After All?

The psychologist Barry Schwartz‘s book The Paradox of Choice (here’s his TED talk on the topic) was, for me at least, very persuasive. It made a compelling if counterintuitive argument: even though many people (economists especially) argue that more choice is almost always a good thing, Schwartz argued that too much choice is actually a bad thing, causing decision paralysis and unhappiness. That’s a simplistic rendering of Schwartz’s argument — there’s an obvious difference between having a lot of political candidates to choose from in an election and having a lot of flavors of jam to choose from in a supermarket — but that’s the gist.

Here’s how Schwartz describes the very memorable jam study, by the psychologists Mark Lepper and Sheena Iyengar:

When researchers set up [in a gourmet food store] a display featuring a line of exotic, high-quality jams, customers who came by could taste samples, and they were given a coupon for a dollar off if they bought a jar. In one condition of the study, 6 varieties of the jam were available for tasting. In another, 24 varieties were available. In either case, the entire set of 24 varieties was available for purchase. The large array of jams attracted more people to the table than the small array, though in both cases people tasted about the same number of jams on average. When it came to buying, however, a huge difference became evident. Thirty percent of the people exposed to the small array of jams actually bought a jar; only 3 percent of those exposed to the large array of jams did so.

Perhaps this result simply confirmed my personal bias, but it did resonate with me, and I often think of the jam experiment when I venture into a store — and, also often, promptly walk out without buying anything if the choice set is too large.

So it was a bit surprising to read Tim Harford‘s column here, in the Financial Times, which argues that the “paradox of choice” may not be real at all. Harford builds his case on both the profit-maximizing behavior of real firms as well as continuing research in the field:

It is hard to find much evidence that retailers are ferociously simplifying their offerings in an effort to boost sales. Starbucks boasts about its “87,000 drink combinations”; supermarkets are packed with options. This suggests that “choice demotivates” is not a universal human truth, but an effect that emerges under special circumstances.

Benjamin Scheibehenne, a psychologist at the University of Basel, was thinking along these lines when he decided (with Peter Todd and, later, Rainer Greifeneder) to design a range of experiments to figure out when choice demotivates, and when it does not.

But a curious thing happened almost immediately. They began by trying to replicate some classic experiments — such as the jam study, and a similar one with luxury chocolates. They couldn’t find any sign of the “choice is bad” effect. Neither the original Lepper-Iyengar experiments nor the new study appears to be at fault: the results are just different and we don’t know why.

After designing 10 different experiments in which participants were asked to make a choice, and finding very little evidence that variety caused any problems, Scheibehenne and his colleagues tried to assemble all the studies, published and unpublished, of the effect.

The average of all these studies suggests that offering lots of extra choices seems to make no important difference either way. There seem to be circumstances where choice is counterproductive but, despite looking hard for them, we don’t yet know much about what they are. Overall, says Scheibehenne: “If you did one of these studies tomorrow, the most probable result would be no effect.” Perhaps choice is not as paradoxical as some psychologists have come to believe. One way or another, we seem to be able to cope with it.

It is of course important to make a distinction between choice and complexity. One reason behind the smart nudge of having new employees at a company be automatically enrolled in a 401(k) plan is that the stack of paperwork and the large, complex set of options will turn some employees off from joining if left to their own devices.

But asking someone who knows nothing about investing to suddenly think about asset allocation, to choose between fixed-income and equity products, between value and growth funds, etc., is a lot more complex than asking her to choose between strawberry jam and marmalade. So even if jam studies of the future prove inconclusive, it still seems wise to streamline choices whose complexity might otherwise hamper a good outcome.

(Hat tip: Marginal Revolution)


SDC

With the Starbucks example, you don't see all the options on the menu. Same as with the 256 ways to get a burger at Wendy's. It's a different thing altogether (pickles? _Y _N).

nasch

"The flaw in the original experiment is pretty obvious to anyone that shops in Whole Foods or Costco: a taster isn't necessarily a buyer."

That's not a flaw. The researchers didn't expect tasters to always be buyers, they set out to see if there was a difference in the rate of buying when the number of choices varied. Assuming they appropriately controlled or accounted for everything else, they did find such a difference. The simple fact that less than 100% of tasters bought some jam isn't really relevant.

AaronS

I remember a story from Hitchcock's Mystery Magazine about a very exclusive restaurant that had no menu. This permitted the chef (it was said) to focus all his culinary talents on the entrees of the evening, rather than running back and forth between roast beef, chicken, pork chops, and so forth.

It seems to me that when restaurants--indeed all manufacturers--get too unfocused, the quality goes down, their energies are wasted by going in too many directions at once, and, ultimately, the customer is poorly served...which means that, ultimately, the manufacturer is going to be in trouble.

Alas, the "solution" to this is a somewhat totalitarian approach to life--"We will tell you what you will have!"--instead of the niche marketing that moves much of capitalism.

By the way, that restaurant? Guess what that perfectly seasoned, absolutely sublime meat was?

Let's just say that should have named the restaurant "Soylent Green."

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Eric M. Jones

I think this should be called the "Baskin-Robbins 31-Flavors Effect".

The TED talk is great. People seems to be happier with fewer choices. My father's version of this was to make a pot of stew-soup-slop and add something to it to replace the volume consumed.

This was really better than it sounds, but you wouldn't eat it for sport. And yes, after some culinary accidents the whole thing was tossed and a new batch started.

It should be noted that Nissan Top Ramen gets away with virtually unchanging fare and does tremendously well (almost 100 billion packs sold per year). This invention is described by some as the most important Japanese invention of the twentieth century. Instant noodles were invented by Momofuku Ando of Nissin Foods, Japan. When he died, the NY Times had it on the front page, an obituary, and a story. This was an important 20th century hero.

For whatever reason, having only Top Ramen to eat is all the choice one needs.

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Jake

This is sort of missing the point, though... I mean it's a worthwhile finding regarding the choice paralysis effect, but the main thesis of the paradox of choice is that more choice tends to lead ultimately to less happiness (in the form of more post-decision regret) rather than more happiness--which is an extremely robust finding. I guess I don't spend enough time with economists to get too excited about the present analysis.

Panem et Circanses

A landmark Harvard Business Review article, maybe written by Schwartz, several years ago said the same thing, that people not only found it harder to make decisions when there were myriad choices, but were less satisfied with them once made as well.

That, people, is the reason online dating is so unsatisfying for so many. Even if you like someone you have just met, there's a real chance someone 'better' is just around the corner.

Keertan Rai

Hundreds of channels feature on the TV set and new ones mushroom everyday. Audience dont seem to be complaining, and the advertisers are surely arent.

I guess the problem of plenty is nonexistent or at best a very short lived phenomenon, as consumers inevitably discover their niches as choices increase

Shai

Coul dit be that differences in nationality predict the effect ? Americans are usually bombarded with choice, which might cause for a counterintuitive demoralization. Europeans, on the other hand, are used to a moderate choice set and thus have no problem deciding what they like or don't.

Being that the original studies where conducted with americans, people where demotivated to begin with - they are used to a lot of choice and are reluctant to approach it. In Europe this was a novel thing - just like the beginngin of massive choice in the 50s in the US - and thus more exciting and motivating

Sagi

I think that there is a difference between having 24 flavors of lets say icecream or jam to choose from (If I eat a scoop twice a week - I will soon be able to taste all of the ~15 options I would find appealing from the 24), and having 24 high def video cameras to choose from. I will have to buy probably one camera.. and "pass" the other 23.

Keith

I am not sure why the authors suggest "It is hard to find much evidence that retailers are ferociously simplifying their offerings."

Walmart's "Project Impact," about which much has been written in the public domain, is all about clarifying the offer and reaching a more efficient assortment.

Walgreens' "Customer Centric Retailing" (CCR) initiative has reduced SKUs by 17% across the board this year.

SuperValu is also reducing SKUs. And so are many other chains. Just this week, CVS announced it was limiting its battery assortment to a single national brand and the retailer's own private label.

Part of the trend towards SKU rationalization has to do with constrained demand and pressure to manage inventories. But there is no question that retailers and their advisors study assortment decisions very carefully, and many believe that a narrower set of choices can result in customer satisfaction that is equal to or greater than a wider set of choices.

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Lobbyist

I hate too much choice. That's why I shop at Trader Joe's instead of the much larger Safeway.

Ken M

I absolutely agree with the notion of the paradox of choice. Think, for example, about the last time you asked a friend or family member where he or she wants to go for dinner.

I have found that it takes people a long time to make a choice if you give them the possibility of every restaurant in town, but if you give them a style of cooking (Chinese, Italian, etc.), they are much more likely to be able to come up with something more quickly.

matt

could it be that the ability to choose wisely has evolved much like our culture/society?

misterb

Seems to me that the difference in experimental results is more about User Interface than User Psychology. This was mentioned in SuperFreakonomics - people react differently to the same phenomena depending on the context. If the attempted reproduction was done in the confines of a lab rather than in an actual supermarket - I'm not at all surprised that the results varied.

Matt Dooley

In sales, we were taught to offer that unlimited choices lead to fewer sales. Put in simple terms: if you offer 38 flavors, the client has to weigh a lot of competing desires. But if you offer "chocolate or vanilla?" the choice is simple.

joel

the reason for this apparently paradoxical results is readily apparent to anyone who understands behavioral economics and has read the work of Gerd Gigerenzer, Peter Todd, etc. People use decision-making heuristics to turn the most complex decision-making into manageable simplicity. when you create an artificial experiment of unknown gourmet jams, it is artificial in that none of the brands are known, no experience, no ability to use the heuristics that shoppers regularly employ. Hence, a real world shopper study will not replicate schwartz' experiment except if you are shopping in a foreign country where the brands are unknown. Voila!

Mojo Bone

Paradox of choice? I think the term you're looking for is option anxiety. Those people in the ice cream aisle talking on a cell phone never look very happy.

michael cunningham

At college I studied marketing and had a friend who studied psychology. He worked at a cinema selling sweets at the interval. He cut the number of packets/boxes of sweets from 20 to 4. When the companies complained he said too many customers spent ages deciding which one to choose whereas with a limited choice decisions were much quicker. Sales went up about 25%. Where time is of the essence choice is less relevant!

joel rubinson

the reason the paradox of choice is wrong is simple. People use non-compensatory decision heuristics to make sure their choices don't get overwhelming. consider the awareness levels of different brands that are broadly distributed. why don't they have 100% awareness? they're on the grocer's shelf for all to see. It's because we immediately filter out irrelevant choices. we filter 90% of what's in the store so our heads don't explode. schwartz is wrong. the answer lies in the Gigerenzer work on decision heuristics and I have blogged about this blog.joelrubinson.net.

George

Every used car salesman knows this simple fact of human nature. You have to reduce the set of choices to two or three cars.