I tend to not read much fiction. Girls hate when I tell them this because it makes me sound boring and unromantic. I can almost always see their eyes roll when I say I prefer reading non-fiction. For me, if I am looking for entertainment or pleasure, I tend to want something that lets me kind of zone out and turn off. Reading is too active for me. I can’t just glaze over and read a pleasure book. That is not to say I don’t get pleasure from reading, but it is a pleasure of learning something new.
I am particularly interested in Behavioral Economics. Why we make certain decisions. One of the notions that always sticks with me is “Choice Paralysis“. When asked, a person will always state that they prefer more choices. “I want the product that suits me perfectly” they think. However, in practice, this is often not the case. When presented with too many choices, we get overwhelmed with a fear that we will pick the wrong product – my choice wasn’t as good in the end as another, or with this much customization this product should have been perfect – and in many cases choose to just avoid the decision entirely.
An interview with a Columbia Business School professor sums it up well:
So when I was a PhD student at Stanford University I used to frequent this grocery store called Draeger’s and you know it was… you had a little bit of that same feeling because this was a store that offered you so many varieties, things you’d never contemplated before, you know like 250 mustards and vinegars and over 500 different kinds of fruits and vegetables, or over 2 dozen different types of water and this is at a time when you know most of us drank tap water, so I used to go to this store and examine all the varieties and we used to marvel at all the choices out there, but I found that I rarely bought anything and I kind of thought that was kind of curious. I mean, they had things that the other grocery stores didn’t have and yet I never bought anything.
And so one day I went to the manager and I asked him whether his model was working and he said, “Well, haven’t you seen how many customers we have in this store?” And yes indeed I had. I mean it was definitely attracting a lot of customers, even attracting tourist buses that would land up at this store and people would go through the store and marvel at all the options, even sometimes take photographs of the various aisles.
So the manager agreed to let me do a little experiment where we put out a little tasting booth next to the entry. We either put out 6 different flavors of jam or 24 different flavors of jam and we looked at 2 things. First, in what case were people more likely to buy a jar of jam? The first thing we looked at, in what case were people more likely to be attracted to the jar or jam, so in which case are people more likely to stop when they saw the display of jams and what we found was that more people stopped when there were 24 jams. About 60% of the people stopped when we had 24 jams on display and then at the times when we had 6 different flavors of jam out on display only 40% of the people actually stopped, so more people were clearly attracted to the larger varieties of options, but then when it came down to buying, so the second thing we looked at is in what case were people more likely to buy a jar of jam. What we found was that of the people who stopped when there were 24 different flavors of jam out on display only 3% of them actually bought a jar of jam whereas of the people who stopped when there were 6 different flavors of jam 30% of them actually bought a jar of jam. So, if you do the math, people were actually 6 times more likely to buy a jar of jam if they had encountered 6 than if they encountered 24, so what we learned from this study was that while people were more attracted to having more options, that’s what sort of got them in the door or got them to think about jam, when it came to choosing time they were actually less likely to make a choice if they had more to choose from than if they had fewer to choose from.
And a large part of that has to do with the fact that when people have a lot of options to choose from they don’t know how to tell them apart. They don’t know how to keep track of them. They start asking themselves “Well which one is the best? Which one would be good for me?” And all those questions are much easier to ask if you’re choosing from six than when you’re choosing from 24 and if you look at the marketplace today most often we have a lot more than 24 of things to choose from.
A great TED talk on this same topic here. He discusses how this choice paralysis is making society as a whole unhappy.:
Think about your own life. Are there things were you are avoiding making a decision on? Is it because you have too many choices? What can you do to par these down and stop the paralysis?