Monday, October 16, 2006

The Paradox of Choice

The dark side of choice ...

"Barry Schwartz’s The Paradox of Choice: Why More is Less talk at the User Interface 11 conference outlined his research on the impact of too many choices on consumer behavior. Schwartz walked through a series of examples that illustrated the problems inherent in our “official syllogism” that more freedom constitutes more welfare (well-being) and that to increase freedom we need to increase choice, which leads us to assume that more choices always increases welfare.

We have lots of choices. In a typical grocery store, you’ll find: 285 varieties of cookies, 75 iced teas, 175 salad dressings, 40 toothpastes, 230 soups, 275 cereals. There are 6.5 million possible stereo systems available at Circuit City. In health care, doctors offer a menu and patients choose. Whether or not you work is a matter of choice. Technology enables us to choose not to. Previously, marital and family arrangements (when and if to get married/have children) was not a question. Now everything is a choice.

Are all these choices a good thing? Yes. Having choices is good but we have always thought it was only good. There is a dark side as well:

Paralysis: so many options that you end up not making a choice. A grocery store alternated allowing customers to sample 24 different flavors of jam & 6 different flavors of jam. With 24, more people came to the table but 1/10th as many people bought jam. In Speed dating, you are more likely to select a match with 6 dates vs. 10. For every 10 mutual funds made available, rate of participation in 401(k) investing goes down 2%.

Decision Quality: when presented with too many options, we do not use difficult criteria to decide but choose on the basis of what is most simple. For 401(k)’s the simplest choice is the worst choice: putting money in a money market account. In retail brand and price are the simplest choices.

Decision Satisfaction: Even when people have chosen well, they are dissatisfied with their results. When you give people lots of options, they will get a better result. But they will feel worse due to regret and anticipated regret. If you did not examine ALL options, you assume one or more might have been better. This reflects opportunity costs: the reduction of value through comparison to other options."    (Continued via Functioning Form)    [Usability Resources]

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