Author: Barry Schwartz
Publication: Scientific American
Focus Area: Consumer Behavior, Decision Making
Relevance: When developing protective strategies for those vulnerable to financial fraud, limiting options may increase participation in, and satisfaction with, a given program (such as protected accounts or savings plans).
Summary: We presume that more choices allows us to get exactly what we want, making us happier. While there is no doubt that some choice is better than none, more may quickly become too much. Drawbacks include:
- Regret: More options means constantly considering the option we didn’t choose –decreasing satisfaction overall.
- Instead, learn to accept “good enough” and stop thinking about it.
- Adaptation: By becoming accustomed to whatever we’ve chosen, the availability to more options decreases our satisfaction with our choice.
- Instead, limit thinking about options foregone, and focus on the positive of the option chosen.
- Unattainable expectations: With increased options, our expectation escalates until we constantly expect to get precisely what we want. Thus anything less than perfect is disappointing, and we blame ourselves (as the decision makers) for our unhappiness.
- Instead, control expectations to a certain standard of requirements, and keep them reasonable.
- Paralysis: Too many options can decrease the likelihood of making any decision at all.
- Instead, limit options when decisions aren’t crucial.
Largely an issue for modern, affluent Western societies, the paradox of too much choice strains consumers’ capacity for decision making. Making financial security decisions simple, easy, and justifiable may facilitate increased and happier participation.
Author Abstract: Americans today choose among more options in more parts of life than has ever been possible before. To an extent, the opportunity to choose enhances our lives. It is only logical to think that if some choice is good, more is better; people who care about having infinite options will benefit from them, and those who do not can always just ignore the 273 versions of cereal they have never tried. Yet recent research strongly suggests that, psychologically, this assumption is wrong. Although some choice is undoubtedly better than none, more is not always better than less.