The Paradox of Choice

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The Paradox of Choice

• Barry Schwartz
• New York
• October 11, 2006

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The Paradox of Choice

• Collaborators
• Andrew Ward Sonja Lyubomirsky
• Katherine White Darrin Lehman
• John Monterosso Jane Gillham
• Jamin Halberstadt Sheena Sethi-Iyengar
• Debby Kemler Nelson Megan Bartges
• Samuel Ho Rachael Wells
• Robert Buechner Ilan Dar Nimrod
• Matt Wallaert Megan Richie
• Gergana Yordanova Maureen Morrin

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The Official Syllogism

• More freedom means more welfare
• More choice means more freedom
• More choice means more welfare

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285 Varieties of Cookies
75 Iced Teas

• 230 Soups

175 Salad Dressings
275 Cereals
40 Toothpastes
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• Phone service

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www.cartoonbank.com
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• Health care
• Patient autonomy
• Direct marketing of drugs

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Work
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Are you multitasking me?
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I just want to go home, crawl into bed, and do
some more work.
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• Is this good news or bad news?

YES!
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There is currently more choice than I need.

• Clothing65
• Washing machines80
• Savings accounts75
• Utilities75
• Cars80
• Cleaning products80
• Cell phones78

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What Too Much Choice Does Paralysis

• Buying jam
• 401(k) investing

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What Too Much Choice Does Decision Satisfaction

• People may do better.
• But they will feel worse

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Why Choice Makes People Miserable

• 1. Regret and anticipated regret

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Why Choice Makes People Miserable

• 1. Regret and anticipated regret
• 2. Opportunity costs

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• Offer participants 2 or a good pen 75
  choose pen

Offer participants 2, or 1 good pen, or 2
cheaper pens 45 choose either pen
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Everything Suffers from Comparison(Brenner,
Rottenstreich, Sood, Psych Science, 1999)
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Yes, it was good for menot as good as it was
the last time, but probably better than its
going to be the time after this.
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Why Choice Makes People Miserable

• 1. Regret and anticipated regret
• 2. Opportunity costs
• 3. Escalation of expectations

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How can choice be good and bad?
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Finding the Sweet Spot

• (Shah Wolford)

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Some Companies Know This

• Proctor and Gamble
• Costco
• Trader Joes and Aldi
• Leading retailer of office supplies
• Greek Diners in NYC

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Whats a Retailer to Do?

• Importance of defaults Libertarian paternalism
• Organize options and pay attention to
  defaults
• Know the user principal/agent
• Find the sweet spot
• NB Getting new customers and keeping old ones
  may lead you in opposite directions!