Thursday, March 24, 2011

The Paradox of Choice, Happiness and Goofy Traditions.

Setting up a possible new comment system, I couldn't help but think of what is known as the paradox of choice discussed by Barry Schwartz at TED shown above.  It turns out, many studies show that if you give people too many options in life they are actually less happy and satisfied with what they have.  Barry discusses several reasons for this:
One effect, paradoxically, is that it produces paralysis, rather than liberation. With so many options to choose from, people find it very difficult to choose at all... A study that was done of investments in voluntary retirement plans... [and] found is that for every 10 mutual funds the employer offered, rate of participation went down two percent... Why? Because with 50 funds to choose from, it's so [darn] hard to decide which fund to choose that you'll just put it off until tomorrow.
I have seen this in my own life.  When faced with too many decisions, equally good in nature in my eyes, I will sometimes put them off and secretly wish someone could have just made the decision for me so I didn't have to worry about it.
The second effect is that even if we... make a choice, we end up less satisfied with the result of the choice than we would be if we had fewer options to choose from. And there are several reasons for this. One of them is that with a lot of different salad dressings to choose from, if you buy one, and it's not perfect... It's easy to imagine that you could have made a different choice that would have been better. And what happens is this imagined alternative induces you to regret the decision you made, and this regret subtracts from the satisfaction you get out of the decision you made, even if it was a good decision.
Again, I was eating lunch the other day with a bunch of good options and as soon as I tasted the one I ordered I thought: "I wonder if the other option was better."  Having several options is what made this initial thought possible.
[Also]... when there are lots of alternatives to consider, it is easy to imagine the attractive features of alternatives that you reject, that make you less satisfied with the alternative that you've chosen.
The grass is always greener on the other side as they say. :)
Third: escalation of expectations. This hit me when I went to replace my jeans... There was a time when jeans came in one flavor... And the shopkeeper said, "Do you want slim fit, easy fit, [names over a dozen choices].. and I walked out of the store -- truth be told -- with the best fitting jeans I had ever had... But I felt worse. Why?... with all of these options available, my expectations about how good a pair of jeans should be went up. I had very low expectations. I had no particular expectations when they only came in one flavor. When they came in 100 flavors, [darn] it, one of them should've been perfect. And what I got was good, but it wasn't perfect. And so I compared what I got to what I expected, and what I got was disappointing in comparison to what I expected.
Again, not to hard to see this is sometimes true.

And lastly, to once again pay tribute to Fiddler on the Roof, which we do from time to time here, I want to point out this one last quote:
With respect to marriage and family, there was a time when the default assumption that almost everyone had is that you got married as soon as you could, and then you started having kids as soon as you could. The only real choice was who, not when, and not what you did after.... Nowadays, everything is very much up for grabs. [Kids these days] are preoccupied, asking themselves, "Should I get married or not? Should I get married now? Should I get married later? Should I have kids first, or a career first?" All of these are consuming questions.
If you remember, Tevye was agonizing over how much freedom to give his daughters in marriage, and he was very flexible for his culture.  However, because of his traditions there were some options not allowed on the table.

To us that may seem too primitive and harsh, but given the paradox of choice, this may have led his daughters to the most happiness.   Perhaps, even though his traditions seem goofy and  primitive, they are actually genius in this context and the thesis of the movie is all too true: "Without our traditions, our lives would be as shaky as... a fiddler on the roof!" (Or as Barry might say, "If it weren't for your traditions you may actually be less happy because of the paradox of choice.")



  1. To take the paradox of choice one step further, consider a salesman.
    The salesman wants to maximize sales. Studies have shown that more people are attracted to more choices, but as discussed in the paradox, fewer of those people actually purchase.

    The solution?
    Consider a specific study done on this topic of a jam salesman at an open air market.
    He had fewer people visit when he only showed 2 jams, but a larger percent of them purchased the (on sale) jams.
    He had many more times people visit when he displayed 50 jams and offered a fixed discount (10-20%) off any one of them, but he made fewer sales than on the day with only 2 options.
    He maximized sales when he displayed 50 jams (to attract people), but only offered discounts on two of them, thus pulling in the largest number of people and simultaneously limiting their choices.

    Next time you find yourself in the market for anything (pool table, bed, food), watch to see this sales tactic employed.

  2. Kyle,

    That's a very interesting story about jam salesman. I guess this is some sort of max-min type problem and I'm sure one economists can have a field day with. :)

  3. I've experienced the paralysis of choice a few months ago when I went to the store to get a new tube of toothpaste. Once I eliminated the expensive brands, all of the other options were about the same price. That was my chief selection criterion, but it hardly whittled down the options. Colgate, Crest, Aquafresh, or something else? Paste or gel? What color? What flavor? What advertised advantages of each variant are the most important to me?

    It took me an embarrassingly long amount of time to finally make my selection--I was paralyzed by too many choices.

  4. Rich,

    I'd be interested in knowing how much time we waste by making choices like this. It's probably not a lot, but I'd still be interested.

    In LA we have the paradox of what of 8 lanes will be the best to choose in traffic. :)

  5. Yeah, this is an interesting aspect of human nature. I've seen that TED talk before. I do prefer many options but that's because I generally seek to maximize future utility and flexibility of whatever I'm buying. And, yes, I do take forever to buy stuff because of this, coupled with my incessant engineering obsession to analyze over all possibilities and scenarios.

    People tell me it sucks to shop with me and I don't blame them! Even so, I still prefer many choices.

  6. One thing I am a little skeptical of is his conclusion that maybe if there was more income redistribution that rich would have less options and be happier. One problem is I think this assumes economics is a zero sum game where if the money in the rich people's hands goes down money in the poor people's hands goes up.

    I think sometimes it doesn't work that way and if you start shuffling money around where there are no market forces both the rich and the poor may have less money in the end. (Meaning you may actually hurt the poor.)

  7. Well, far be it from me to play economist, since I'm not, but I think generally economist do think of the economy as a set of available resources to be allocated appropriately. The primary role of the economy is to hopefully allocate resources optimally. Fairly hard to optimize over a constantly changing domain.

    However, I certainly think that total resources can be increased (e.g. the population is getting larger), but at least over short time periods it's probably reasonable to assume there is a finite number of resources available.

    Nevertheless, I'm with you in that I don't think that the rich having less money means the poor will have more. Especially because this ignores the number one money hole in the world, U.S. gov't. Gov't is the worst economic player there is.

  8. …One effect, paradoxically, is that it produces paralysis…

    Finiteness of brain’s ability to process?

    I was eating lunch the other day with a bunch of good options…

    Go to Chinese or Indian buffet! You will find you don’t have big enough tummy to put away all that you liked! The dissatisfaction arises from limited belly, not inability to satisfy options! (I stopped going to these places a long time ago!)

  9. I agree that sometimes when I go to a large Chinese buffet I end up trying only a fraction of dishes I want before I get too full. :)

  10. This is also probably a reason why when dieting it is a good idea to use a smaller plate. (Buffets also use this as a tactic to get people to eat less.) When making decisions at the buffet line, most people don't think about how much they can reasonably eat (i.e. the stomach is only a minor player in the decision-making process). When you finish your plate and are making the decision whether or not to go back, the stomach (i.e. how full you are) is a major player in the decision.

    Also, at the buffet line, the options are numerous, leading many people to try to take a little bit of many things (i.e. trying to avoid the analysis paralysis). However, afterwards, at the table, the options are limited (do I go back for more or not). I'm sure there are many more factors that come into play, but I'm not a psychologist. Nonetheless, interesting post.

  11. Or we become unsatisfied, even with all the options! Rich exhibit this the most! I know of a plastic surgeon who is perpetually dissatisfied with looks of all the people he meets! No kidding!

  12. It reminds me of looking at different types of shampoo in a supermarket once (it was while I was on my mission in Argentina). There was a whole line of shampoos where each one had two (and exactly two) special features. The different shampoos would give "body", "moisture", "shine", "color enhancement", "health" or "scalp treatment", along with a few other things. The thing is each one was combined with another so that each bottle advertised "body and shine" or "moisture and color" or "shine and health" or just about any combination. The problem was, we always wanted a certain combination that they never had. So we came up with the idea of each one of us buying one bottle each and then we just combine all of them together and put the mixture back in the bottles, and that way we each got the benefits of all of the different types without actually buying all of them. That was the best hair of my entire mission.

  13. Another problem with making that conclusion is that happiness isn't only dependent on avoiding analysis paralysis. All of a sudden having fewer options when you are used to having more options doesn't make you happier -- quite the opposite in fact.


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