Roger’s $0.02 - Too Much Choice

Image from 27707

Conventional wisdom has it that choice is a good thing. Being able to select an option that best suits your lifestyle whether it's a cell phone plan, streaming service, investment plan, or whatever it is ensures you come away satisfied. Yet research into the psychology of decision-making shows the opposite. Contrary to what most of us believe too much choice can be a mentally debilitating condition and consequently people end up unhappier.

In marketing the term choice is often bandied about as a positive. From the selection in online stores, to trim options on your new automobile selection we are confronted with choices on every consumer decision we make. But it is the psychology of the consumer who ultimately decides what gets selected. What I mean by that is the thought process on consumption isn’t as straightforward as it seems. We typically attribute a binary decision tree to when we buy something. If I want a bag of chips (crisps) I go to the store and decide based on availability, price, and variety. Typically I would say I like Doritos so they have that brand in a size and price that I am willing to pay. Decision made and I’m out of the store with a bag of salty snacks content if not happy with my purchase. Yet things aren’t as simple as they seem.

In a 2004 issue of Scientific American, Barry Schwartz wrote an article titled “The Tyranny of Choice”. In it, he explains research he and his colleagues conducted into why people seem to be unhappy when their choices increase. Part of his research used a questionnaire to separate people into “Maximizers”, those who want to strive to make the best possible choice, and “Satisficers”, whose goal is to make a good enough choice. The results found “Maximizers” were generally less unhappy with their decisions than “Satisficers”. They had a tendency to experience buyer’s remorse and spent more time reflecting on their decisions than “Satisficers”, and studies have shown that loss is often felt more powerfully than gains.

The primary issue identified in this evaluation was opportunity cost. The New Oxford American Dictionary defines it as “the loss of potential gain from other alternatives when one alternative is chosen”. In other words, people were concerned about what they were missing by selecting one option over another. For example for your fast food order, if you pick french fries as your side order you might have FoMO for not selecting the onion rings instead. When you add more choices the decision tree becomes more complex.

The second identified issue was something mentioned previously. Regret. A belief that they made the wrong choice was made and felt obliged to live with it. A sunk cost belief. That since you’ve already paid for something you might as well use it. An example used in the article was the purchase of concert tickets. Those who paid the full price were likely to show up to the show compared to a person who had purchased the tickets at a discount simply because they would experience greater regret if they didn’t go.

The third facet was adaption. We grow accustomed to our new purchase be it a new service or piece of technology. A personal example. In the mid-2000s I was very keen on assembling a full 5.1 surround sound setup at home. I diligently read product reviews on home audio websites as well as customer reviews on Amazon. After about I year I had everything assembled. Speakers, subwoofer, 5.1 A/V receiver, HDTV, and of course a DVD player that supported all the surround sound formats. For the first week, I was elated. I played every DVD disk I owned multiple times to immerse myself in my new auditory setup. But something strange happened. By week three I was over it. Nothing really changed technically, but I had grown accustomed to the sounds of gunfire, explosions, and fictional monsters around me. I had adapted my hearing to 5.1 audio. It wasn’t new and it no longer excited me in a way it had previously.

The fourth cause was high expectations. I think most of us have had this feeling at one time or another. You expect a certain level of performance or gratification from a service, piece of media, food, clothes, technology, vacation, or whatever is. When it doesn’t meet it you feel disappointed. But the key here is context. I’ve often said that people are more willing to be okay with mediocre food if the cost is low. I’m willing to stop at Mcdonald's to buy something for my kids, wife, and myself even though I dislike the food. But when I recently spent $50 at the Shake Shack I felt extremely a little cheated. The food was mildly better than Mcdonald's but enough to explain the $25 difference especially since the kids hated their chicken nuggets. I was very regretful of choosing that place to eat.

An excess of choice often leads to decision paralysis. Where people were unable to make a choice or made a decision but felt regret for having done so. When you need to choose between a limited set of choices you can get a sense of what works best for you. If you have too many choices this leads maximizers to figure out the best deal they think they’ll get. It can be fatiguing behavior and when that person feels they made the wrong choice it often leads to depression and unhappiness Psychologically these regrets can be internalized as a personal failing.

So why bring this issue up? Well, when it comes to technology whether it's services like video streaming or products like video games or hardware we are often presented with an excess of choice. We have tiers of services, bundled services, and of course choice in color, functionality, and price of our gadgets. We’re offered choices in a confusing array of ways that make more sense as a marketing scheme than any real price or segmentation that makes sense for most people. And if you think about it companies often package undesirable/unwanted things with much more compelling options because they need to sell them. You see it when you shop for a new MacBook or iPhone online. You see it when you’re debating the need to sign-up for a new streaming service as you weigh the constantly changing available content against the subscription cost. The question isn’t whether we should eliminate choice but rather what are the diminishing returns of available choice against emotional health. Being bummed about second-guessing buying decisions doesn’t seem like a big deal. But when the consequence is general miasma about your maybe excess choice is no choice at all.