The Paradox of Choice

Imagine that you need milk, so you go to the grocery store to pick some up. When you get to the dairy aisle you see that there are dozens of options. These days, not only do you have to make a decision on the percentage of fat you want (1%, 2%, skim, etc.), but also what source you want your milk to be coming from: cows, almonds, soybeans, oats…the list goes on. Almost dumbfounded, you stand in front of the aisle and have no idea what milk to pick. There are so many choices that you are overwhelmed.

This phenomenon is known as the paradox of choice and it is becoming a concern in the modern world, where more and more options are becoming easily available to us. If we only had to choose between 1% and 2% milk, it is easier to know which option we prefer, since we can easily weigh the pros and cons. When the number of choices increases, so does the difficulty of knowing what is best. Instead of increasing our freedom to have what we want, the paradox of choice suggests that having too many choices actually limits our freedom.

Choice overload: the tendency for people to get overwhelmed when they are presented with a large number of options, often used interchangeably with the term paradox of choice.

Maximizer: an individual who seeks out the most optimal (maximum utility) outcome when making a decision.² Satisficer: an individual who is more concerned about making a decision that is ‘good enough’ and fulfills their desired criteria instead of making the best decision.²

Choice architecture: techniques that are implemented to organize the context under which people make decisions in order to influence them to make certain decisions.³

Second-order decisions: decisions that follow a kind of rule, that acts as a strategy to help people make ordinary decision-making easier or simpler.⁴

Opportunity cost/missed opportunities: the benefits of options that are not chosen when one makes a certain choice. This includes hypothesizing about missed opportunities and can be mentally costly to calculate.⁵

The paradox of choice was popularized by American psychologist Barry Schwartz when he published his book, The Paradox of Choice: Why More is Less, in 2004. Schwartz, who has long studied the ways in which economics and psychology intersect, became interested in seeing the way that choices were affecting the happiness of citizens in Western societies. He identified that the range of choices that we have available to us these days is far greater than people had in the past; however, consumer satisfaction has not increased as much as traditional economics theories might expect.⁶

One of the central tenets of western societies, especially America, is freedom. This freedom is often associated with choice, with a belief that greater choice is equated to greater freedom. This logic is easy to follow: instead of being forced to choose between one or two different options, people have the freedom to choose between an almost unlimited number of options. Businesses and corporations often also follow this ideology, believing that more choices will lead to greater customer utility.⁷

However, Schwartz found that having this unparalleled plethora of choice in the modern world was actually causing people to be less happy with their decisions. He found that instead of increasing decision satisfaction, having too many options made people less likely to be satisfied that they had made the best decision. While freedom is important, Schwartz explains that there is a fine line between having the freedom to choose what you want and being paralyzed in the face of too many options. In his paper “Doing Better but Feeling Worse” that came out in the same year as his book, Schwartz and co-author Andrew Ward claimed that “unconstrained freedom leads to paralysis.” (1)⁵

As we make social, scientific and technological advances, we find ourselves with more options than were available to previous generations. The choice of what milk to buy is but one example of the ways in which we have become privy to an abundance of choices. There are hundreds of options for what kind of clothes we should purchase, the groceries we should buy, the car we should be driving, the beauty products we should be using, the restaurant we should eat at… the list goes on and on. While on the surface, the profusion of options might seem like it should increase consumer satisfaction, since people are more likely to find one option that fits their particular wants and needs, we can also become very overwhelmed. While it is easy to choose option A if there is only an option B, it becomes much harder to gauge the value and utility of A when there are options A-Z. As a result, we encounter a choice overload and become more dissatisfied with the choice that we eventually make.

The paradox of choice is not only a concern for economics and consumer satisfaction but an issue that is popping up in various areas of our lives as our possibilities come nearer and nearer to being endless. Moreover, the internet and social media has made it easier for us to see all the different options that are available to us, no longer having to physically stand in a store to determine what our options are. Fast-paced advances being made in technology and science also mean that there seems to be new kinds of jobs created on the daily – not to mention all the different social media applications that created a whole host of jobs (influencers, social media specialists, etc). Social media has also changed the way that we choose a life partner. Dating apps like Tinder and Hinge have enabled people to have dozens of options of who to date at their fingertips.

Following Herbert Simon’s ideas on bounded rationality and satisficing, Schwartz identified that the paradox of choice carries the most consequence for people that are maximizers. Maximizers, unlike satisficers, are concerned with making the best choice instead of simply making a choice that they are happy with. When there are many options available to maximizers, it becomes harder for them to determine which is the best, which can cause them to feel a great deal of regret after they have made a choice. Additionally, when there are more options, opportunity costs are greater and can leave people with more regret.

Instead of adhering to the belief that freedom of choice is unbounded, Schwartz suggests that “self-determination within significant constraints – within ‘rules’ of some sort – that leads to well-being, to optimal functioning” (1).⁵ It is within this ideology that Schwartz advocates that the role of psychology and behavioral economics is to find the kind of limitations on freedom that can lead to the greatest level of happiness within society.

While many studies have demonstrated that people are less satisfied with the decisions they make the more options are available, other studies have conflicting evidence. For example, the decoy effect suggests that we feel more strongly about an option when there are three options than if there are only two. The paradox of choice has been criticized for not having enough concrete and scientific evidence behind it and critics often offer up countering evidence, such as the fact that Starbucks, which boasts a menu with hundreds of possibilities and customizations, is an incredibly popular and profitable company.8 Another phenomenon that counters the paradox of choice is single-choice aversion, identified by Daniel Mochon, professor of marketing. Single-choice aversion suggests that people are unwilling to choose an attractive option if there are no alternative options since they have nothing to compare it against.⁸

Barry Schwartz, the father of the paradox of choice, acknowledges that these controversial findings are likely apparent. He suggests that if all the studies based on the ways that options impact choice were compiled, we would likely find that they average out; sometimes more options leads to increased satisfaction, sometimes it leads to diminished satisfaction. However, instead of this opposing evidence suggesting that we don’t need to concern ourselves over the impact of choice, Schwartz suggests that it is about finding the right balance between having too many options and not enough options. He doesn’t think the studies that offer results different to what is expected by the paradox of choice undermine the effect’s credibility; instead, research needs to become more nuanced to find the magic number that can optimize people’s happiness.⁹

The study that initially sparked Barry Schwartz interest in the matter was conducted by Sheena Iyengar and Mark Lepper, who are also important figures in behavioral science, in 2001.¹⁰ In their paper “When Choice is Demotivating: Can One Desire Too Much of a Good Thing”, Iyengar and Lepper outlined an experiment they conducted where too many options caused consumers to be less likely to buy a product, although they did not coin this phenomenon as the paradox of choice.¹⁰

In their study, Iyengar and Lepper wanted to see how the volume of choice impacted consumer behavior. In the first variable, shoppers at a grocery store encountered a display table with gourmet jam. If shoppers tasted at least one jam (they were free to try as many as they liked), they were given a $1 discount coupon to use to purchase any jam. In the extensive-choice condition, the display table had 24 different varieties of gourmet jam. In the limited-choice condition, the display table had only six different varieties of gourmet jam.

Iyengar and Lepper measured both the number of individuals in each condition that visited the display table and tried jams and how many consumers in each condition actually made a purchase. The psychologists found that while more shoppers that passed the display table with 24 jams stopped to try when compared to the number of individuals who stopped at the display table with six jams, people in the limited-choice condition were actually more likely to make a purchase. The researchers concluded that while an abundance of options might initially seem attractive to consumers, having too many options might actually cause someone not to make any decision at all.¹⁰

Back in the day, our grandparents had a limited pool of options for who they could date. Without the internet, they had to rely on meeting people in-person and the number of single people they met within a suitable age-range was not very large.

These days, dating apps like Tinder have changed the game. We no longer have to rely on meeting someone that runs in the same circles as we do. The app allows us to swipe through potential matches that we may never have crossed paths with, who are essentially complete strangers. At first thought, this seems great – we now have access to all these people who we never would have been able to conventionally meet!

However, with so many possibilities for a partner right at your fingertips, so too enters the paradox of choice. How do you pick one person to date when there are so many other options out there that might be better? This might mean that you make rash decisions since you don’t have enough time to look through all the options or you might careless with your decisions and swipe right on everyone.¹¹

As a result of the paradox of choice, people also seem less likely to commit or spend the necessary quality time getting to know someone since they can just get right back on the app. One user, in an article for Stanford Daily, writes “the seemingly infinite supply of options allowed me to care less, to distance myself, to treat people like items in an online shopping cart… as a result, I found myself deeply unhappy with all of it”.¹²

Why More Choice Means Less Freedom

Opening with a joke where an individual enters a cafe and faces option after option of how they would like their tea (what kind, what kind of milk they want with it, what kind of sweetener they’d like, etc.), our writer Arash Sharma explores the risks of an abundance of choice. After outlining the problems caused by having too many options, Sharma offers up some advice to both consumers and producers on how to limit the dissatisfaction that accompanies the paradox of choice.

The Behavioral Science Guide to Gift Giving

In this article, our writer Preeti Kotamarthi examines the ways in which behavioral science can help people make the best decisions when it comes to giving gifts, an important social custom. Kotarmarthi understands that there are so many choices with what to buy our friends and family that we often fall victim to the paradox of choice and make suboptimal decisions. Kotarmarthi offers up strategies to reduce the effect that the paradox of choice has on our happiness and the happiness of the gift receivers.

Do I Agree? Cognitive Bias and Terms of Service

Describing people’s tendency to scroll through terms of service and click agree without actually reading them, our writer Tiago Rodrigo examines the cognitive bias behind our disregard of the specificities of terms of service. He suggests that one reason behind this tendency is the fact that websites and services overload us with information we become overwhelmed and make a rash decision without taking the time to consider the details and nuances of our decision. The overload of information parallels the paradox of choice and can cause consumers to feel a great deal of anxiety and distress.

1. Goodreads. (n.d.). Barry Schwartz (Author of the paradox of choice) Quotes. Retrieved January 6, 2021, from https://www.goodreads.com/author/quotes/6957.Barry_Schwartz
2. Bernstein, E. (2014, October 6). How You Make Decisions Says a Lot About How Happy You Are. Wall Street Journal. https://www.wsj.com/articles/how-you-make-decisions-says-a-lot-about-how-happy-you-are-1412614997
3. The Decision Lab. (2020, December 15). Nudges.https://thedecisionlab.com/reference-guide/economics/nudges
4. Sunstein, C. R., & Ullmann-Margalit, E. (1998). Second-order decisions. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.101268
5. Schwartz, B., & Ward, A. (2012). Doing better but feeling worse: The paradox of choice. Positive Psychology in Practice, 86-104. https://doi.org/10.1002/9780470939338.ch6
6. Barry Schwartz: Are we happier when we have more options? (2013, November 15). National Public Radio. https://www.npr.org/2013/11/15/245034685/are-we-happier-when-we-have-more-options
7. Barry Schwartz: Are we happier when we have more options? (2013, November 15). National Public Radio. https://www.npr.org/2013/11/15/245034685/are-we-happier-when-we-have-more-options
8. Thompson, D. (2013, August 19). More Is More: Why the Paradox of Choice Might Be a Myth. The Atlantic. https://www.theatlantic.com/business/archive/2013/08/more-is-more-why-the-paradox-of-choice-might-be-a-myth/278658/
9. Schwartz, B. (2014, January 29). Is the famous ‘paradox of choice’ a myth? PBS NewsHour. https://www.pbs.org/newshour/economy/is-the-famous-paradox-of-choice
10. Iyengar, S. S., & Lepper, M. R. (2001). When Choice is Demotivating: Can One Desire Too Much of a Good Thing? Journal of Personality and Social Psychology, 79(6), 995-1006. https://doi.org/10.1017/cbo9780511618031.017
11. Nixon, C. (2020, October 7). Do Dating Apps Affect Relationship Decision Making? The Decision Lab. https://thedecisionlab.com/insights/society/do-dating-apps-affect-relationship-decision-making/
12. Bersh, L. (2020, February 26). On the paradox of choice, Tinder. The Stanford Daily. https://www.stanforddaily.com/2020/02/26/on-the-paradox-of-choice-tinder/