The Paradox of Choice!

With the mid-sems over, my focus in the rest of the semester would be mainly on two things – my research assistantship project where I’d be working to create a codec for enabling lossless HD Quality Video Transmission over the internet and a preparation of My MS thesis which would involve understanding human preference and choice making and coming up with a knowledge based computational model for the same. In preparation for the second part, I stumbled upon this excellent video by Dr. Barry Schwartz from Swathmore College. The lecture is pretty interesting considering that its given by a Prof. of Psychology from a Management School at one of the technically smartest places in the world – Google! It’s even more interesting for me since it regarding preference and choice – something which is a central theme of my MS thesis.

The lecture starts with an understanding of how choice and freedom have almost become synonymous in most modern societies like America. It then gives some interesting statistics on how people have more choice today in things that they earlier had less choice and have newer domains with an abundance of choice where earlier they did not. Its illustrated by an excellent example of how today the only cellphone that you can’t buy is one thats only a phone. Thanks to cosmetic surgery, how you look is a matter of choice – your bad looks are totally your fault. From reinventing your identity to making the smallest decisions about life – it is all today a matter of choice.

Even though most of this increased choice is good, in the remainder of the lecture the Professor explains how this has impacted life in a negative sense. As an example, a survey from Europe suggested that people when asked if there was more choice today than they needed, responded with a majority ‘yes’ for ALL product-categories surveyed for.Other examples from options of essays given to college students and retail stores also show similar results. There are a few effects of this increased choice:

a) PARALYSIS OF CHOICE – This is the effect that makes the subjects take no decision on being swamped by choice instead of taking the best one. e.g. When a company offers mutual fund options to its employees to invest in, the participation goes down by 2% for every 10 more saving options suggested.

The caveats to this rule are:

i) Preference Articulation – If you know EXACTLY what you are looking for, more options are good.

ii) One-Dimensional Choice – If the different options are in the same dimension (different sized weights of the same product) then more choice is good.

b) DUMBNESS OF CHOICE – You make worse decisions when the choice swamps you than when you had less choice to make. The reason is people start to use a simplifying strategy and then the criteria for making the decision become simpler – and quite often for worse. e.g. the employees who do make investment put their money in a money-market account which is clearly the worst way to make investment given the low interest rates, simply because the criterion changes to ‘the ease of decision making’!

c) DEPRESSION OF CHOICE – Even if you survive the above 2 rules and make the best decision, the chances are the you’d end up depressed with your decision, given the realization that you are missing out on all the options you traded-off while making your choice. The more alternatives there are the easier it is to regret the alternatives you missed. The sum of all the missed opportunities (opportunity costs) negate the satisfaction of the decision and leave a void! This is shown by a study that shows, if you offer a college student $2 or a good pen, 75% choose the pen. However, when offered $2, a good pen or 2 cheaper pens, only 45% choose either pen. Another aspect is one of self-blame. With fewer options, the world is to be blamed for providing lesser options but with this juggernaut of available options, we are ourselves to blame for making the wrong choice. Aiming for ‘the best’ rather than ‘good-enough’ further exacerbates the problem since if the best thing is a little disappointing in the possibilities of satisfaction one tends to feel let down.

Hence by the law of diminishing returns, the curve of satisfaction from choice starts dipping after a given value of choice and after a certain point causes less satisfaction than what you had when you did not have choice. The relation between choice and satisfaction is not monotonous.

All this is perhaps one reason for increased depression in American society today. This doesent mean that everything was better earlier. Its just that expectations have risen so much that nothing today is beyond expectation (especially for the affluent) and hence we miss the old feeling of ‘going beyond expectations’!

The ‘Leakage Principle‘ – The context in which you make a decision is also determining in the effects of that decision. Having an agent to take decisions not just saves you from the effort but also from the comparisons and hence from the self-blame that you’d get by knowing the options of that comparison. Companies like Costco are successful Because of limited selection options and not In spite of them.

Libertarian Paternalism‘ – To avoid the paralysis problem this method aims to change the options in such a way that in case the subject does not react, they do not get paralyzed but instead and get something that is ALMOST in their interest. e.g. instead of asking people if they want to donate their organs, ask them if they DO NOT want to donate the organ (i.e. they donate it by default). So they get the choice (libertarian view) but still get the best in case they dont make the choice (paternalism).

Here is an article with a similar view

I’ll need to make sure that all this fits into my model of preference and choice! As the famous lines in Urdo go:


– had I had the control over the choices in my life, would I have been so spent on this road of desires?


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3 Responses to “The Paradox of Choice!”

  1. Surabhi Says:

    U write very well…
    Hidden talent…
    Need to bookmark ur blog now…;)

  2. Do I make bad choices or do choices make me bad? « Says:

    […] to be at the epicenter of all the sadness in life. I’m not referring to the more practical ‘Paradox of Choice’ type problem with the overabundance of choice that I discussed years…, but rather with the very nature of choice itself. When we choose, we decide and the biases in our […]

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