Have you ever gone to a restaurant with friends and spent 30 minutes deciding what to order? And when the waiter comes to take your order, your answer is “I’ll have the same as her”... Too many options on the menu and uncertainty about the potential benefits of each choice can be overwhelming. Therefore, as research also suggest, it can push us towards not making a choice at all (Iyengar & Lepper, 2000).
What about trying to pick a movie to watch with a friend? You spend an hour looking through Netflix, Amazon Movies and HBO, but end up watching trailers for an hour instead of choosing a movie.
Why is that?
Try to remember a conversation with friends or a partner when trying to decide what to have for dinner or which restaurant to choose from. Or, think about a time when you had to choose what university to attend, which car to buy or what mobile phone to get. These are examples of decisions we have to make where there is an abundance of different options available.
The question becomes, what happens in such situations?
As stated, we make an abundance of choices all the time, every day. From choosing what to wear, when to get out of bed, whether or not you’ll go to work, etc. If we had to rationalise over all these decisions, we’d never get anything done. Therefore, we tend to use heuristics when making decisions. These are shortcuts, rules of thumb and are based on experience or history of learning, and help us get through life relatively smooth. However, when presented with many available equivalent choices, this process becomes more complicated (Iyengar & Lepper, 2000).
Barry Schwartz (2004) emphasises that there is a common supposition in society today that the more choices we have, the better it is for the consumer. This also assumes that we have the ability to manage all these choices. Iyengar & Lepper (2000) also shows that previous research has made a compelling case for the psychological benefits of providing choices, and this is probably true in many cases.
However, recent research shows that providing many choices does not necessarily lead to higher motivation or better decision-making. Findings suggest that while an array of options might seem very appealing to the consumer, it can also decrease the likelihood of us buying the product. Unlike the common supposition, the greater the number of alternatives, the more likely we are to use heuristics (shortcuts) such as choosing our default or not choosing at all (Iyengar & Lepper, 2000). Therefore, even though competition is healthy for the marked it also seems to make things more difficult for the consumer.
There are many different factors influencing our day-to-day decision-making. Some of the cognitive biases influencing the choices we make are;
“All my mates are watching Suits. Therefore, it must be a good choice”.
This is what we call the Bandwagon Effect where we adopt something simply because a number of other people are doing it. Therefore, when presented with an abundance of choices this might influence your decision.
“Naaah, Netflix is definitely the best service out there”.
This might be true, but we tend to favour prior evidence over new, and therefore are more likely to choose something familiar. This is linked to both Conservatism bias and Status Quo Bias and is closely tied to choosing the default option, or what is already known. In other words, we favour maintaining the current situation even though the alternative could offer greater utility.
“You know what. It sounds good, but I have been subscribing to HBO for years now and I am very happy with it”.
Again, it might be the best alternative, but according to the Ambiguity effect, when we lack information we tend to choose the option where the likelihood of a favourable outcome is known. This is also closely tied to the Mere Exposure Effect, where we develop a preference for things merely because they are familiar to us. Hence, when we’re presented with too many options; again we’re likely to choose something which is known.
We also tend to be loss averse and this is an important factor when talking about decision making. We put greater emphasis on potential losses than potential gains. This also suggests that we tend to choose options where the outcome or potential gains are known.
These are some of the potential biases influencing our decision-making when presented with an abundance of choices. However, another side effect is avoiding making a choice altogether. Schwartz (2004) argues that increasing the number of choices can create anxiety for shoppers. Hence, the consumer may avoid making a decision. Remember the example of choosing a movie together with a friend. After going through all the providers searching for a movie or series to watch, you eventually give up and avoid making a choice. Best case scenario you go with your default or use a heuristics when making a decision (Tversky & Shafir, 1992).
Interestingly enough, the effect is reversed when people are choosing for another person (Polman, 2012). The study found that the effect is dependent on the situation, so choosing between an abundance of alternatives is not aversive in itself. It’s when you have to make choices that directly influence yourself, that it becomes more complicated. So, if given the opportunity to choose which car your mate should buy, the process won’t be as painful or complicated.
References
Future Shock, Alvin Toffler, 1984
Polman, E. (2012). Effects of Self–Other Decision Making on Regulatory Focus and Choice Overload. Journal of Personality and Social Psychology, 102(5), 980-993.
Shah, A. M., & Wolford, G. (2007). Buying Behavior as a Function of Parametric Variation of Number of Choices. Psychological Science, 18(5), 369–370. https://doi.org/10.1111/j.1467-9280.2007.01906.x
Tversky, A., & Shafir, E. (1992). The Disjunction Effect in Choice under Uncertainty. Psychological Science, 3(5), 305–310. https://doi.org/10.1111/j.1467-9280.1992.tb00678.x
Schwartz, B. (2004). The paradox of choice: Why more is less. New York: Ecco.
Iyengar, S. S., & Lepper, M. R. (2000). When choice is demotivating: can one desire too much of a good thing? J Pers Soc Psychol, 79(6), 995-1006.167&sr=1-1