Do More Choices Really Make Us Happier? Choice Paradox and Human Decision-Making.

The other day I was out at a greasy spoon for breakfast. I was half asleep and happy to see there were only two items on the menu. Nice and simple, I don’t have to think, just have to choose option 1; standard breakfast, or option 2; omelet. Oh but how wrong I was!

Here is a rough memory of my conversation with the waitress:

Waitress: “What would you like to order?”

Paula: “Standard breakfast please”

Waitress: “How would you like your eggs? Scrambled, over easy, sunny side up, fried, well done, boiled or poached”?

Paula: “ummmmmm, over-easy”

Waitress: “How would you like your toast? White, brown, rye, whole wheat or a bagel?

Paula: “ummmm, brown”

Waitress: “Would you like bacon, sausage, felafel or back-bacon?

Paula: “oh man, I guess bacon”

Waitress: “Would you like coffee, tea or orange juice?”

Paula: “oh um, I think tea”

 Waitress: “Green tea, black tea, mint tea, herbal tee, decaf tea?

Paula: “Black tea”

I don’t even like my eggs over-easy and I much prefer rye toast over brown toast. So why would I order them? The overwhelming number of choices for each aspect of my breakfast made it difficult for me to choose what option I actually wanted. I felt overwhelmed by all the options and felt pressure to choose quickly since I was at a restaurant. The result, I pretty much picked at random just to be finished with the process. And then was unhappy with the result.

Now this abundance of choice is not solely breakfast’s fault. Products are being offered in a huge variety of options across almost every consumer industry. According to my own math Lays offers 39 different flavours of potato chips in the United States. Walmart carries 60 different types of toothpaste, Old Navy offers 206 different types of women’s jeans and Starbucks boasts that they offer over 87,000 different drink combinations.

laysThis constant expansion of choice seems to be based on the idea that more is better and that choice equals freedom. Or companies think the more they make, the happier people will be and therefore, the more they will buy. But does all this choice actually make us any happier? At what point does too much choice actually equal restriction and even stress?

The Jam Study

A study conducted in 2002 by professors at Columbia University and Stanford University tested this relationship between choice and purchase. In a series of high-end groceries stores in the United States the study set up two different gourmet jam tasting stations. The first jam station offered 24 jams to taste while the second offered only 6 jams.

The percentage of people who stopped to taste the jams?

Screen Shot 2014-11-06 at 11.18.44 AM

The percentage of people who actually purchased a jam after trying one?

Screen Shot 2014-11-06 at 11.18.37 AM

Interestingly enough this study seems to suggest people don’t actually like choice, they like the illusion of choice, but ultimately find too many choices difficult to deal with. In fact in the Behavioural Economics’ sphere this is referred to as Choice Paradox (or the Paradox of Choice) since an abundance of choice often renders people unable to choose effectively. Barry Schwarts, author of the Paradox of Choice; Why More is Less, explains that an abundance of choice makes people overwhelmed, stressed and anxious. Schwarts goes as far as to say “Unconstrained freedom leads to paralysis”. Emphasizing that the increase of choice leads to the decrease in ability to make effective decisions.

So what is it in our decision-making that makes choice so stressful for humans? Dr. Russel James from the Texas Tech University explains it best, “Choice and our satisfaction are driven by the comparisons we make”. Basically, as our choices increase we have to make more and more comparisons, and this increase in comparisons leads to lower satisfaction because we can’t tell which option is actually better. Think of this way:

Which ice cream flavour would you choose?

icecreammsimple2

Easy, right? And most likely you eat the ice cream and be happy with your choice.

Now which ice cream flavour would you choose?

Icecream2

Humans just hate making decisions, its stressful, it is hard work and it has consequences. As the number of choices in any situation increases it forces our brain to work harder to evaluate all of the options. We try to compare every option available and recall past decisions for similar situations.

As we have noticed the number of choices available in any one industry is insane. Can you imagine having to evaluate 87,000 different drink combinations at Starbucks before ordering?

So what do humans do when faced with vast choice? How do we survive in a world of over whelming options? It seems as if our coping mechanism for vast choice situations is to choose something familiar to us. We might buy the exact same drink at Starbucks each time or alternate between three we know well. This appears to help our brains because it relieves the need to evaluate all of the options available. As Dr. James explained it also makes us happier because it removes the risk for potential disappointment from a new choice.

There are of course some brands who have figured this out. Even Costco themselves – the Kings of choice – have started to slim their offerings. In an article by the New York Times, Costco CEO explains that the company has tuned into the fact that, “Selling fewer items increases sales volumes…”. One of their newer company philosophies is to sell a limited number of items. While Walmart sells 60 types of toothpaste, Costco only offer 4 toothpaste options.

The most interesting part about Choice Paradox is that it backs up why humans like to choose from three choices, as we discussed in last weeks blog. It is widely believed that the Centre Stage Effect is most effective when 3 options are presented and becomes less effective as the number of choices increases. If we include Barry Schwartz studies, at some point in increases choices people just begin to choose at random and no longer are influenced by a Centre Stage Effect. However my guess is that Social Proof could still play a part in human decision making even when a large number of options are offered.

Which ice cream flavour would you choose?

Icecream

In all of this it is not say choice is important to humanity and that people shouldn’t try new things. It is just to talk about and explain how excessive choice puts stress on our brains and can make us feel as if we are in a Choice Paradox. We seem to like the idea of vast choice but dislike actually having to pick from vast options. Another example of the humans brain irrationality.


More Reading and References

http://www.businessinsider.com/costco-is-the-anti-walmart-2012-11#ixzz3IEDrPrte

http://www.patriotledger.com/article/20140930/BUSINESS/309309952/12335/NEWS?template=printart

http://www.ted.com/talks/barry_schwartz_on_the_paradox_of_choice/transcript?language=en 

http://www.economist.com/node/17723028

http://www.jeremysaid.com/customers-will-choose-middle-offer/

http://www.slideshare.net/rnja8c/paradox-of-choice-2139360

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