The Paradox of Choice – 6 Tips for Better Decision Making

December 20, 2018

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Do you remember when life was simple? The only choice you had to make was which cartoon to watch if they aired at the same time and you were happy either way.

Now it seem that like the fear of missing out has gotten the better of all of us. It seems like this world is getting faster and bigger by the minute and we have to adapt or go down.

Maybe the most notable change the modern time has brought us is the number of choices we face in almost every situation. As the time to decide is usually pretty short, that kind of abundance brings us nothing but frustration and fear that we could have done better.

A famous American psychologist Barry Schwartz decided at one point to dedicate his time to study and scrutinize the paradox of choice. His book, named The Paradox of Choice – Why More Is Less, was published in 2004 and has been intriguing the public ever since.

Schwartz’s most powerful and popular theory from the book is definitely the one claiming that eliminating consumer choices can greatly reduce anxiety for shoppers.

Aren’t we all mesmerized when we see a super equipped new boutique, bookshop or a grocery store?

Well, seems like we are more confused and even defeated by the number of possible selections. Being humans is what makes it even harder, as we are capable of dissing of our instinct and let the freedom of choice gets us.

Freedom of choice is crucial for our well-being, but in this case, in this kind of world that we live in (read: consumerism), we don’t seem to be benefiting from it psychologically.

How come we are loosing in this equation?

Schwartz gathered his argumentation from a variety of fields of modern psychology that study happiness as it is. He focused on how it can be affected by success or failure. Obviously, he took the Americans as an example (as no other culture was exposed to so many choices as Americans are in their everyday life).

He went as far as to compare their opportunity to choose (in the supermarket, for example) to that “ancient” and well recognized “problem” of choosing among a variety of classes at an Ivy League college. 

“If we’re rational, social scientists tell us, added options can only make us better off as a society. This view is logically compelling, but empirically it isn’t true.”

He says. And, unfortunately, he’s right.

Alas, this troublemaker is not reserved for shopping or entertainment only. It goes all the way down to the most important issues.

Let’s take, for example, retirement plans. At one point, a certain accounting firm was offering 156 different plans. Yes, you read it well. 156!
Of course, choosing the best option becomes the employees’ responsibility.

And exactly that is the problem. Does anyone feel like they are competent enough to choose the right one between 156 varieties of pension plans?
And when we finally do (because we must), Schwartz says, this is what happens:

“We end up less satisfied with the result of the choice than we would be if we had fewer options to choose from.”

It is as simple as this – when there are lots of alternatives to consider, it is very easy to imagine the attractive features of alternatives that you reject that make you less satisfied with the alternative that you’ve chosen.

And there lies the source of all frustrations when it comes to choosing between many given options. Increased choice, in the end, makes us anguished. And key ingredients of that anguish are regret, self-blame and opportunity costs.

The thought of that first choice you rejected in the last moment will haunt you forever.

And it doesn’t stop there.

A new problem arises from the situation of increased choice. It is called the escalation in expectations.

When having to choose among many available options, you somehow feel that there must be a perfect choice for you. A perfect shampoo, a perfect pair of jeans, a perfect company, a perfect faculty… Your job then becomes to find it and be happy for the rest of your life. And, if not…

Well, if not – your days will be filled with a self-doubt (as you weren’t able to choose your “perfect” option) and frustration (because, if you were, you would be living a happy-go-lucky life by now).

The key thought in Swartz’s book is:

The secret to happiness is low expectations.

This couldn’t be closer to the truth.

Schwartz maintains that focusing on our own wants is what got us here in the first place. Following our needs and desires gave birth to the abundance choices.

What can we do then?

Schwartz gave us an idea or two.

The Paradox of choice - 6 simple rules

• Figure out your goal or goals.

Did you choose that restaurant because the chicken was really good, or do you have pleasant memories of having dinner with your girlfriend there or celebrating your promotion? Beware of memories, those can mess up your choice really good.

• Evaluate the importance of each goal.

Daniel Kahneman and Amos Tversky have researched how people make decisions and they came to the conclusion that we assume that the more available some piece of information is to memory, the more frequently we must have encountered it in the past. That is not always the case. Not even frequently. And that is how the “fake” importance is nurtured.

• Array the options.

Kahneman and Tversky also found that personal “psychological accounts” can produce the effect of framing the choice and determining what options are considered as subjects to factor. There are many things that can be done to make this easier. You can use a sheet of paper, a white board or if you are a bit more tech oriented, an efficiency tool that can help you sort things out.

• Evaluate how likely each of the options is to meet your goals.

It is often said that “creative accountants can make a corporate balance sheet look as good or as bad as they want it to look.” Schwartz sees most people as creative accountants when it comes to keeping their own psychological balance sheet.

• Pick the winning option.

If you think of it, all options are already attached to choices just by being considered. When the options are not already attached, they are not part of the endowment and choosing them is perceived as a gain.

• Modify goals

By using the consequences of the choice to modify our goals and the importance we assign to them, we are also modifying an accuracy of the claim that this very choice was the right one.

So, next time you found yourself in front of many, many, many options – just take a deep breath and try to remember what we said in this blog. Or, just grab the closest orange juice on the shelf and never think about it again.

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