The Paradox of Choice

A large array of options may discourage consumers because it forces an increase in the effort that goes into making a decision. So consumers decide not to decide, and don’t buy the product. Or if they do, the effort that the decision requires detracts from the enjoyment derived from the results. Also, a large array of options may diminish the attractiveness of what people actually choose, the reason being that thinking about the attractions of some of the unchosen options detracts from the pleasure derived from the chosen one.

According to a survey conducted by Yankelovich Partners, a majority of people want more control over the details of their lives, but a majority of people also want to simplify their lives. There you have it—the paradox of our times.

Most good decisions will involve these steps: Figure out your goal or goals. Evaluate the importance of each goal. Array the options. Evaluate how likely each of the options is to meet your goals. Pick the winning option. Later use the consequences of your choice to modify your goals, the importance you assign them, and the way you evaluate future possibilities.

Nobel Prize–winning psychologist Daniel Kahneman and his colleagues have shown that what we remember about the pleasurable quality of our past experiences is almost entirely determined by two things: how the experiences felt when they were at their peak (best or worst), and how they felt when they ended.

The discrepancy between logic and memory suggests that we don’t always know what we want.

So it seems that neither our predictions about how we will feel after an experience nor our memories of how we did feel during the experience are very accurate reflections of how we actually do feel while the experience is occurring. And yet it is memories of the past and expectations for the future that govern our choices.

When products are essentially equivalent, people go with what’s familiar, even if it’s only familiar because they know its name from advertising.

The availability heuristic says 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. This heuristic is partly true. In general, the frequency of experience does affect its availability to memory. But frequency of experience is not the only thing that affects availability to memory. Salience or vividness matters as well.

What often saves us from our faulty decision-making process is that different people experience different vivid or salient events, and thus have different events available to memory.

We are all susceptible to making errors, but we’re not each susceptible to making the same errors, because our experiences are different. As long as we include social interactions in our information gathering, and as long as our sources of information are diverse, we can probably steer clear of the worst pitfalls.

Kahneman and Tversky point out, people tend to avoid taking risks—they are “risk averse”—when they are deciding among potential gains, potential positive outcomes.

Kahneman and Tversky again point out, people embrace risk—they are “risk seeking”—in the domain of potential losses.

Some studies have estimated that losses have more than twice the psychological impact as equivalent gains. The fact is, we all hate to lose, which Kahneman and Tversky refer to as loss aversion.

Fairly subtle manipulations of wording can affect what the neutral point is and whether we are thinking in terms of gains or losses. And these manipulations will in turn have profound effects on the decisions we make—effects that we really don’t want them to have, since in an important sense, discounts and surcharges are just two ways of saying the same thing.

The endowment effect helps explain why companies can afford to offer money-back guarantees on their products. Once people own them, the products are worth more to their owners than the mere cash value, because giving up the products would entail a loss.

Aversion to losses also leads people to be sensitive to what are called “sunk costs.”

Thus the growth of options and opportunities for choice has three, related, unfortunate effects.   It means that decisions require more effort. It makes mistakes more likely. It makes the psychological consequences of mistakes more severe.

As a decision strategy, maximizing creates a daunting task, which becomes all the more daunting as the number of options increases.

To satisfice is to settle for something that is good enough and not worry about the possibility that there might be something better. A satisficer has criteria and standards. She searches until she finds an item that meets those standards, and at that point, she stops.

I believe that the goal of maximizing is a source of great dissatisfaction, that it can make people miserable—especially in a world that insists on providing an overwhelming number of choices, both trivial and not so trivial.

When Nobel Prize–winning economist and psychologist Herbert Simon initially introduced the idea of “satisficing” in the 1950s, he suggested that when all the costs (in time, money, and anguish) involved in getting information about all the options are factored in, satisficing is, in fact, the maximizing strategy. In other words, the best people can do, all things considered, is to satisfice.

Maximizers savor positive events less than satisficers and do not cope as well (by their own admission) with negative events. After something bad happens to them, maximizers’ sense of well-being takes longer to recover. Maximizers tend to brood or ruminate more than satisficers.

If you’re a maximizer, every option has the potential to snare you into endless tangles of anxiety, regret, and second-guessing.

Our expectation was confirmed: people with high maximization scores experienced less satisfaction with life, were less happy, were less optimistic, and were more depressed than people with low maximization scores. In fact, people with extreme maximization scores—scores of 65 or more out of 91—had depression scores that placed them in the borderline clinical depression range.

They do not show that being a maximizer causes unhappiness, because correlation does not necessarily indicate cause and effect. Nonetheless, I believe that being a maximizer does play a causal role in people’s unhappiness, and I believe that learning how to satisfice is an important step not only in coping with a world of choice but in simply enjoying life.

Whereas maximizers might do better objectively than satisficers, they tend to do worse subjectively.

But maximizing is not a measure of efficiency. It is a state of mind. If your goal is to get the best, then you will not be comfortable with compromises dictated by the constraints imposed by reality.

While maximizers and perfectionists both have very high standards, I think that perfectionists have very high standards that they don’t expect to meet, whereas maximizers have very high standards that they do expect to meet.

The truth is that maximizing and satisficing orientations tend to be “domain specific.” Nobody is a maximizer in every decision, and probably everybody is in some. Perhaps what distinguishes maximizers from satisficers is the range and number of decisions in which an individual operates as one or the other.

But it is certainly possible that choice and maximizing are not independent of each other. It is possible that a wide array of options can turn people into maximizers. If this is true, then the proliferation of options not only makes people who are maximizers miserable, but it may also make people who are satisficers into maximizers.

Seligman’s discovery of learned helplessness has had a monumental impact in many different areas of psychology. Hundreds of studies leave no doubt that we can learn that we don’t have control. And when we do learn this, the consequences can be dire. Learned helplessness can affect future motivation to try. It can affect future ability to detect that you do have control in new situations. It can suppress the activity of the body’s immune system, thereby making helpless organisms vulnerable to a wide variety of diseases. And it can, under the right circumstances, lead to profound, clinical depression.

What seems to be the most important factor in providing happiness is close social relations. People who are married, who have good friends, and who are close to their families are happier than those who are not. People who participate in religious communities are happier than those who do not. Being connected to others seems to be much more important to subjective well-being than being rich.

In the context of this discussion of choice and autonomy, it is also important to note that, in many ways, social ties actually decrease freedom, choice, and autonomy.

If unrestricted freedom can impede the individual’s pursuit of what he or she values most, then it may be that some restrictions make everyone better off. And if “constraint” sometimes affords a kind of liberation while “freedom” affords a kind of enslavement, then people would be wise to seek out some measure of appropriate constraint.

A WAY OF EASING THE BURDEN THAT FREEDOM OF CHOICE IMPOSES IS to make decisions about when to make decisions. These are what Cass Sunstein and Edna Ullmann-Margalit call second-order decisions. One kind of second-order decision is the decision to follow a rule.

Apparently we always think we want choice, but when we actually get it, we may not like it. Meanwhile, the need to choose in ever more aspects of life causes us more distress than we realize.

PART OF THE DOWNSIDE of abundant choice is that each new option adds to the list of trade-offs, and trade-offs have psychological consequences. The necessity of making trade-offs alters how we feel about the decisions we face; more important, it affects the level of satisfaction we experience from the decisions we ultimately make.

ECONOMISTS POINT OUT THAT THE QUALITY OF ANY GIVEN OPTION cannot be assessed in isolation from its alternatives. One of the “costs” of any option involves passing up the opportunities that a different option would have afforded. This is referred to as an opportunity cost.

Thinking about opportunity costs may not change the decision you make, but it will give you a more realistic assessment of the full implications of that decision.

The existence of multiple alternatives makes it easy for us to imagine alternatives that don’t exist—alternatives that combine the attractive features of the ones that do exist. And to the extent that we engage our imaginations in this way, we will be even less satisfied with the alternative we end up choosing. So, once again, a greater variety of choices actually makes us feel worse.

Adding the second option creates a conflict, forcing a trade-off between price and quality. Without a compelling reason to go one way or the other, potential consumers pass up the sale altogether. By creating the conflict, this second option makes it harder, not easier to make a choice.

The presence of a clearly inferior alternative makes it easier for consumers to take the plunge.

Difficult trade-offs make it difficult to justify decisions, so decisions are deferred; easy trade-offs make it easy to justify decisions. And single options lie somewhere in the middle.

The emotional cost of potential trade-offs does more than just diminish our sense of satisfaction with a decision. It also interferes with the quality of decisions themselves. There is a great deal of evidence that negative emotional states of mind narrow our focus. Instead of examining all aspects of a decision, we home in on only one or two, perhaps ignoring aspects of the decision that are very important. Negative emotion also distracts us, inducing us to focus on the emotion rather than on the decision itself. As the stakes of decisions involving trade-offs rise, emotions become more powerful, and our decision making can be severely impaired.

Positive emotion has the opposite effect—when we are in a good mood, we think better. We consider more possibilities; we’re open to considerations that would otherwise not occur to us; we see subtle connections between pieces of information that we might otherwise miss.

This creates something of a paradox. We seem to do our best thinking when we’re feeling good. Complex decisions, involving multiple options with multiple features (like “Which job should I take?”) demand our best thinking. Yet those very decisions seem to induce in us emotional reactions that will impair our ability to do just the kind of thinking that is necessary.

With fewer options and more constraints, many trade-offs would be eliminated, and there would be less self-doubt, less of an effort to justify decisions, more satisfaction, and less second-guessing of the decisions once made.

We all learn as we grow up that living requires making choices and passing up opportunities. But our evolutionary history makes this a difficult lesson. Learning to choose is hard. Learning to choose well is harder. And learning to choose well in a world of unlimited possibilities is harder still, perhaps too hard.

So it might seem like good advice to encourage people to approach their decisions as reversible and their mistakes as fixable. The door stays open. The account stays active. Facing decisions—large or small—with this attitude should mitigate many of the stresses and negative emotions we’ve been examining. Yes, but at a price.

So keeping options open seems to extract a psychological price. When we can change our minds, apparently we do less psychological work to justify the decision we’ve made, reinforcing the chosen alternative and disparaging the rejected ones. Perhaps we do less work putting opportunity costs of the rejected alternatives out of our minds.

Most of us seem to share the intuition that we regret actions that don’t turn out well more than we regret failures to take actions that would have turned out well. This is sometimes referred to as an omission bias, a bias to downplay omissions (failures to act) when we evaluate the consequences of our decisions.

The omission bias undergoes a reversal with respect to decisions made in the more distant past. When asked about what they regret most in the last six months, people tend to identify actions that didn’t meet expectations. But when asked about what they regret most when they look back on their lives as a whole, people tend to identify failures to act. In

Bronze medalists are happier than silver medalists. As the silver medalists stand on the award platform, they’re thinking about how close they came to winning the gold.

When confronted with decisions, we often choose the option that minimizes the chances that we will experience regret.

We show greater willingness to take risks when we know we will find out how the unchosen alternative turned out and there is thus no way to protect ourselves from regret.

We have seen that two of the factors affecting regret are Personal responsibility for the result How easily an individual can imagine a counterfactual, better alternative

When considering a decision involving complex possibilities, the fact that there is no one option that is best in all respects will induce people to consider the opportunity costs associated with choosing the best option. And the more options there are, the more likely it is that there will be some that are better in certain respects than the chosen one. So opportunity costs will mount as the number of options increases, and as opportunity costs mount, so will regret.

This ubiquitous feature of human psychology is a process known as adaptation. Simply put, we get used to things, and then we start to take them for granted.

Because of adaptation, enthusiasm about positive experiences doesn’t sustain itself. And what’s worse, people seem generally unable to anticipate that this process of adaptation will take place. The waning of pleasure or enjoyment over time always seems to come as an unpleasant surprise.

Novelty can change someone’s hedonic standards so that what was once good enough, or even better than that, no longer is.

Human beings, Scitovsky said, want to experience pleasure. And when they consume, they do experience pleasure—as long as the things they consume are novel. But as people adapt—as the novelty wears off—pleasure comes to be replaced by comfort.

Most are driven instead to pursue novelty, to seek out new commodities and experiences whose pleasure potential has not been dissipated by repeated exposure. In time, these new commodities also will lose their intensity, but people still get caught up in the chase, a process that psychologists Philip Brickman and Donald Campbell labeled the hedonic treadmill. No matter how fast you run on this kind of machine, you still don’t get anywhere. And because of adaptation, no matter how good your choices and how pleasurable the results, you still end up back where you started in terms of subjective experience.

The mistake is to assume that the way it feels at that moment is the way it will feel forever.

The more we invest in a decision, the more we expect to realize from our investment. And adaptation makes agonizing over decisions a bad investment.

This means that when we are making decisions, we should think about how each of the options will feel not just tomorrow, but months or even years later. Factoring in adaptation to the decision-making process may make differences that seem large at the moment of choice feel much smaller. Factoring in adaptation may help us be satisfied with choices that are good enough rather than “the best,” and this in turn will reduce the time and effort we devote to making those choices. Finally, we can remind ourselves to be grateful for what we have. This may seem trite, the sort of thing one hears from parents or ministers, and then ignores. But individuals who regularly experience and express gratitude are physically healthier, more optimistic about the future, and feel better about their lives than those who do not. Individuals who experience gratitude are more alert, enthusiastic, and energetic than those who do not, and they are more likely to achieve personal goals. And unlike adaptation, the experience of gratitude is something we can affect directly. Experiencing and expressing gratitude actually get easier with practice. By causing us to focus on how much better our lives are than they could have been, or were before, the disappointment that adaptation brings in its wake can be blunted.

Almost by definition, to be a maximizer is to have high standards, high expectations.

“How am I doing?” almost always carries “compared to others” in parentheses.

The moods of happy people improved when they got positive feedback and worsened when they got negative feedback, but whether they heard or didn’t hear the feedback given to their partner made no difference. Unhappy people, on the other hand, were very much affected by the feedback their partner received.

Happy people have the ability to distract themselves and move on, whereas unhappy people get stuck ruminating and make themselves more and more miserable.

Unlimited choice, I believe, can produce genuine suffering.

Contrast this with societies in which marriages are arranged, so people have little control over whom they marry, or societies in which educational opportunities are limited, so people have little control over what they learn. The key fact about psychological life in societies in which you have little control over these aspects of life is that you also have little expectation of control. And because of this, I think, lack of control does not lead to feelings of helplessness and depression.

ALONG WITH THE PERVASIVE RISE IN EXPECTATIONS, AMERICAN CULTURE has also become more individualistic than it was, perhaps as a by-product of the desire to have control over every aspect of life.

Our heightened individualism means that, not only do we expect perfection in all things, but we expect to produce this perfection ourselves. When we (inevitably) fail, the culture of individualism biases us toward causal explanations that focus on personal rather than universal factors. That is, the culture has established a kind of officially acceptable style of causal explanation, and it is one that encourages the individual to blame himself for failure. And this is just the kind of causal explanation that promotes depression when we are faced with failure.

UNATTAINABLE EXPECTATIONS, PLUS A TENDENCY TO TAKE INTENSE personal responsibility for failure, make a lethal combination. And, as we have come by now to expect, this problem is especially acute for maximizers. As they do in regard to missed opportunities, regret, adaptation, and social comparison, maximizers will suffer more from high expectations and self-blame than will satisficers. Maximizers will put the most work into their decisions and have the highest expectations about the results of those decisions, and thus will be the most disappointed.

Try the following: Review some recent decisions that you’ve made, both small and large (a clothing purchase, a new kitchen appliance, a vacation destination, a retirement pension allocation, a medical procedure, a job or relationship change). Itemize the steps, time, research, and anxiety that went into making those decisions. Remind yourself how it felt to do that work. Ask yourself how much your final decision benefited from that work. This exercise may help you better appreciate the costs associated with the decisions you make, which may lead you to give up some decisions altogether or at least to establish rules of thumb for yourself about how many options to consider, or how much time and energy to invest in choosing.

As you go through the exercise of reviewing recent choices you’ve made, not only will you become more aware of associated costs, you’ll discover that there are some things you really care about, and others you don’t. This will allow you to Shorten or eliminate deliberations about decisions that are unimportant to you; Use some of the time you’ve freed up to ask yourself what you really want in the areas of your life where decisions matter; And if you discover that none of the options the world presents in those areas meet your needs, start thinking about creating better options that do.

To become a satisficer, however, requires that you think carefully about your goals and aspirations, and that you develop well-defined standards for what is “good enough” whenever you face a decision. Knowing what’s good enough requires knowing yourself and what you care about. So: Think about occasions in life when you settle, comfortably, for “good enough”; Scrutinize how you choose in those areas; Then apply that strategy more broadly.

There are some strategies you can use to help you avoid the disappointment that comes from thinking about opportunity costs: Unless you’re truly dissatisfied, stick with what you always buy. Don’t be tempted by “new and improved.” Don’t “scratch” unless there’s an “itch.” And don’t worry that if you do this, you’ll miss out on all the new things the world has to offer.

Knowing that you’ve made a choice that you will not reverse allows you to pour your energy into improving the relationship that you have rather than constantly second-guessing it.

We can vastly improve our subjective experience by consciously striving to be grateful more often for what is good about a choice or an experience, and to be disappointed less by what is bad about it.

We can mitigate regret by Adopting the standards of a satisficer rather than a maximizer. Reducing the number of options we consider before making a decision. Practicing gratitude for what is good in a decision rather than focusing on our disappointments with what is bad.

So, to be better prepared for, and less disappointed by adaptation: As you buy your new car, acknowledge that the thrill won’t be quite the same two months after you own it. Spend less time looking for the perfect thing (maximizing), so that you won’t have huge search costs to be “amortized” against the satisfaction you derive from what you actually choose. Remind yourself of how good things actually are instead of focusing on how they’re less good than they were at first.

To make the task of lowering expectations easier: Reduce the number of options you consider. Be a satisficer rather than a maximizer. Allow for serendipity.

Choice within constraints, freedom within limits, is what enables the little fish to imagine a host of marvelous possibilities.