The Paradox of Choice: Why More Is Less

by Barry Schwartz

Responsibility for medical care has landed on the shoulders of patients with a resounding thud. I don’t mean choice of doctors; we’ve always had that (if we aren’t among the nation’s poor), and with managed care, we surely have less of it than we had before. I mean choice about what the doctors do. The tenor of medical practice has shifted from one in which the all-knowing, paternalistic doctor tells the patient what must be done—or just does it—to one in which the doctor arrays the possibilities before the patient, along with the likely plusses and minuses of each, and the patient makes a choice.

Only a decade ago, doctors made the decisions; patients did what they were told. Doctors did not consult patients about their desires and priorities, and routinely withheld information—sometimes crucial information, such as what drugs they were on, what treatments they were being given, and what their diagnosis was. Patients were even forbidden to look at their own medical records; it wasn’t their property, doctors said. They were regarded as children: too fragile and simpleminded to handle the truth, let alone make decisions. And they suffered for it. They suffered because some doctors were arrogant and/or careless. Also, they suffered because sometimes choosing the right course of action was not just a medical decision, but a decision involving other factors in a patient’s life—the patient’s network of family and friends, for example. Under these circumstances, surely the patient should be the one making the decision.

Gawande has no doubt that giving patients more responsibility for what their doctors do has greatly improved the quality of medical care they receive. But he also suggests that the shift in responsibility has gone too far: The new orthodoxy about patient autonomy has a hard time acknowledging an awkward truth: patients frequently don’t want the freedom that we’ve given them. That is, they’re glad to have their autonomy respected, but the exercise of that autonomy means being able to relinquish it. Gawande goes on to describe a family medical emergency in which his own newborn daughter Hunter stopped breathing. After some vigorous shaking started the little girl breathing again, Gawande and his wife rushed her to the hospital. His daughter’s breathing continued to be extremely labored, and the doctors on duty asked Gawande whether he wanted his daughter intubated.

Even if I made what I was sure was the right choice for her, I could not live with the guilt if something went wrong…I needed Hunter’s physicians to bear the responsibility: they could live with the consequences, good or bad.

Ask yourself what is the point of advertising prescription drugs (antidepressant, anti-inflammatory, antiallergy, diet, ulcer—you name it) on prime-time television. We can’t just go to the drugstore and buy them. The doctor must prescribe them. So why are drug companies investing big money to reach us, the consumers, directly? Clearly they hope and expect we will notice their products and demand that our doctors write the prescriptions.

What is casual? A New Yorker piece about this phenomenon identified at least six different kinds of casual: active casual, rugged casual, sporty casual, dressy casual, smart casual, and business casual. As writer John Seabrook put it, “This may be the most depressing thing about the casual movement: no clothing is casual anymore.”

If it were up to us to choose whether or not to have choice, we would opt for choice almost every time. But it is the cumulative effect of these added choices that I think is causing substantial distress. As I mentioned in Chapter 1, we are trapped in what Fred Hirsch called “the tyranny of small decisions.” In any given domain, we say a resounding “yes” to choice, but we never cast a vote on the whole package of choices. Nonetheless, by voting yes in every particular situation, we are in effect voting yes on the package—with the consequence that we’re left feeling barely able to manage.

The way that the meal or the music or the movie makes you feel in the moment—either good or bad—could be called experienced utility. But before you actually have the experience, you have to choose it. You have to pick a restaurant, a CD, or a movie, and you make these choices based upon how you expect the experiences to make you feel. So choices are based upon expected utility. And once you have had experience with particular restaurants, CDs, or movies, future choices will be based upon what you remember about these past experiences, in other words, on their remembered utility. To say that we know what we want, therefore, means that these three utilities align, with expected utility being matched by experienced utility, and experienced utility faithfully reflected in remembered utility. The trouble is, though, that these three utilities rarely line up so nicely.

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. This “peak-end” rule of Kahneman’s is what we use to summarize the experience, and then we rely on that summary later to remind ourselves of how the experience felt. The summaries in turn influence our decisions about whether to have that experience again, and factors such as the proportion of pleasure to displeasure during the course of the experience or how long the experience lasted, have almost no influence on our memory of it.

example of the peak-end rule in operation. Men undergoing diagnostic colonoscopy exams were asked to report how they felt moment by moment while having the exam, and how they felt when it was over. Most people find these exams, in which a tube with a tiny camera on the end is inserted up the rectum and then moved around to allow the inspection of the gastrointestinal system, quite unpleasant—so much so that patients avoid getting regular tests, much to their peril. In the test, one group of patients had a standard colonoscopy. A second group had a standard colonoscopy plus. The “plus” was that after the actual examination was over, the doctor left the instrument in place for a short time. This was still unpleasant, but much less so because the scope wasn’t moving. (Note that both groups of patients were having the colonoscopies for legitimate medical reasons; they were not subjecting themselves to these procedures just for the sake of the experiment.) So the second group experienced the same moment-by-moment discomfort as the first group, with the addition of somewhat lesser discomfort for twenty seconds more. And that is what they reported, moment-by-moment, as they were having the procedure. But a short time after it was over, the second group rated their experience as less unpleasant than did the first. Whereas both groups had the same peak experience, the second group had a milder end experience. And it made a difference. It turned out that, over a five-year period aft...

Unfortunately, providing consumers with useful decision-making information is not the point of all this advertising. The point of advertising is to sell brands. According to James Twitchell, the key insight that has shaped modern advertising came to cigarette manufacturers in the 1930s. In the course of market research, they discovered that smokers who taste-tested various cigarette brands without knowing which was which couldn’t tell them apart. So, if the manufacturer wanted to sell more of his particular brand, he was either going to have to make it distinctive or make consumers think it was distinctive, which was considerably easier. With that was born the practice of selling a product by associating it with a glamorous lifestyle. We probably like to think that we’re too smart to be seduced by such “branding,” but we aren’t. If you ask test participants in a study to explain their preferences in music or art, they’ll come up with some account based on the qualities of the pieces themselves. Yet several studies have demonstrated that “familiarity breeds liking.” If you play snippets of music for people or show them slides of paintings and vary the number of times they hear or see the music and the art, on the whole people will rate the familiar things more positively than the unfamiliar ones. The people doing the ratings don’t know that they like one bit of music more than another because it’s more familiar. Nonetheless, when products are essentially equivalent, people ...

Consumer Reports makes its judgments about the reliability of cars by soliciting input from its thousands and thousands of readers. It compiles this input into an estimate of reliability for each make and model of car. So when Consumer Reports says that a car is reliable, it is basing its conclusion on the experience of thousands of people with thousands of cars. This doesn’t mean that every single Volvo driver will have the same story to tell. But on average, the reports of Volvo owners are more positive about reliability than the reports of the owners of other cars. Now along comes this friend to tell you about one particular Volvo owner and one particular Volvo. How much weight should you give this story? Should it undo conclusions based on the thousands of cases assessed by Consumer Reports? Of course not. Logically, it should have almost no influence on your decision. Unfortunately, most people give substantial weight to this kind of anecdotal “evidence,” perhaps so much so that it will cancel out the positive recommendation found in Consumer Reports. Most of us give weight to these kinds of stories because they are extremely vivid and based on a personal, detailed, face-to-face account. Kahneman and Tversky discovered and reported on people’s tendency to give undue weight to some types of information in contrast to others. They called it the availability heuristic.

People mistook the pervasiveness of newspaper stories about homicides, accidents, or fires—vivid, salient, and easily available to memory—as a sign of the frequency of the events these stories profiled. This distortion causes us to miscalculate dramatically the various risks we face in life, and thus contributes to some very bad choices.

It's like reporting bias.

The benefits of multi-individual information assessment is nicely illustrated by a demonstration that financial analyst Paul Johnson has done over the years. He asks students to predict who will win the Academy Award in several different categories. He tabulates the predictions and comes up with group predictions—the nominees chosen by the most people for each category. What he finds, again and again, is that the group predictions are better than the predictions of any individual. In 1998, for example, the group picked eleven out of twelve winners, while the average individual in the group picked only five out of twelve, and even the best individual picked only nine.

One high-end catalog seller of mostly kitchen equipment and gourmet foods offered an automatic bread maker for $279. Sometime later, the catalog began to offer a larger capacity, deluxe version for $429. They didn’t sell too many of these expensive bread makers, but sales of the less expensive one almost doubled! With the expensive bread maker serving as an anchor, the $279 machine had become a bargain.

This is called anchoring, when people compare to a certain price.

CONTEXT THAT INFLUENCES CHOICE CAN ALSO BE CREATED BY language. Imagine two gas stations at opposite corners of a busy intersection. One offers a discount for cash transactions and has a big sign that says: DISCOUNT FOR PAYING CASH! CASH—$1.45 per GALLON CREDIT—$1.55 per GALLON The other, imposing a surcharge for credit, has a small sign, just above the pumps, that says: Cash—$1.45 per Gallon Credit—$1.55 per Gallon The sign is small, and doesn’t call attention to itself, because people don’t like surcharges. Beyond the difference in presentation, though, there is no difference in the price structure at these two gas stations. A discount for paying cash is, effectively, the same as a surcharge for using credit. Nonetheless, fuel-hungry consumers will have very different subjective responses to the two different propositions. Daniel Kahneman and Amos Tversky call this effect framing.

To figure out why prospect theory gives us this curve rather than a straight line, let’s look at the two halves of the graph separately. The top, right portion of the graph depicts responses to positive events. The thing to notice about this curve is that it’s steepness decreases as it moves further to the right. Thus, an objective gain of say $100 may give 10 units of subjective satisfaction, but a gain of $200 won’t give 20 units of satisfaction. It will give, say, 18 units. As the magnitude of the gain increases, the amount of additional satisfaction people get out of each additional unit decreases. The shape of this curve conforms to what economists have long talked about as the “law of diminishing marginal utility.”

the graph of prospect theory in view, think about this question: would you rather have $100 for sure or have me flip a coin and give you $200 if it comes up heads and nothing if it comes up tails? Most people asked this question go for the sure $100. Let’s see why. A sure $100 and a fifty-fifty chance for $200 are in some sense equivalent. The fact that the payoff for the risky choice is double the payoff for the sure thing exactly compensates for the fact that the chances you’ll get the payoff are halved. But if you look at the graph, you’ll see that psychologically, you won’t feel twice as good with $200 in your pocket as you will with $100 in your pocket. You’ll feel about 1.7 times as good. So to make the gamble psychologically worthwhile to you, I’d have to offer you something like $240 for a heads. Thus, 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.

let’s look at the other side of the graph, which depicts response to losses. It too is a curve, not a straight line. So suppose I asked you this question: would you rather lose $100 for sure or have me flip a coin so that you lose $200 if it comes up heads and you lose nothing if it comes up tails? As in the last example, double the amount is compensated for by half the chances. If you don’t like risks in the first problem, you probably won’t like them in the second either. This suggests you’ll take the sure loss of $100. But chances are you didn’t, and the graph tells us why. Notice that the curve falls steeply at the beginning and then gradually levels off. This reflects what might be called the “decreasing marginal disutility of losses.” Losing the first $100 hurts worse than losing the second $100. So although losing $200 may be twice as bad objectively as losing $100, it is not twice as bad subjectively. What that means is that taking the risk to perhaps avoid losing anything is a pretty good deal. Thus, as Kahneman and Tversky again point out, people embrace risk—they are “risk seeking”—in the domain of potential losses.

Losing $100 produces a feeling of negativity that is more intense than the feelings of elation produced by a gain. 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.

This phenomenon is called the endowment effect. Once something is given to you, it’s yours. Once it becomes part of your endowment, even after a very few minutes, giving it up will entail a loss. And, as prospect theory tells us, because losses are more bad than gains are good, the mug or pen with which you have been “endowed” is worth more to you than it is to a potential trading partner. And “losing” (giving up) the pen will hurt worse than “gaining” (trading for) the mug will give pleasure. Thus, you won’t make the trade.

You buy a pair of shoes that turn out to be really uncomfortable. What will you do about them? Thaler suggests: The more expensive they were, the more often you’ll try to wear them. Eventually, you’ll stop wearing them, but you won’t get rid of them. And the more you paid for them, the longer they’ll sit in the back of your closet. At some point, after the shoes have been fully “depreciated” psychologically, you will finally throw them away.

Susceptibility to error can only get worse as the number and complexity of decisions increase, which in general describe the conditions of daily life. Nobody has the time or cognitive resources to be completely thorough and accurate with every decision, and as more decisions are required and more options are available, the challenge of doing the decision making correctly becomes ever more difficult to meet.

Even with relatively unimportant decisions, mistakes can take a toll. When you put a lot of time and effort into choosing a restaurant or a place to go on vacation or a new item of clothing, you want that effort to be rewarded with a satisfying result. As options increase, the effort involved in making decisions increases, so mistakes hurt even more. 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.

the very wealth of options before us may turn us from choosers into pickers. A chooser is someone who thinks actively about the possibilities before making a decision. A chooser reflects on what’s important to him or her in life, what’s important about this particular decision, and what the short-and long-range consequences of the decision may be. A chooser makes decisions in a way that reflects awareness of what a given choice means about him or her as a person. Finally, a chooser is thoughtful enough to conclude that perhaps none of the available alternatives are satisfactory, and that if he or she wants the right alternative, he or she may have to create it. A picker does none of these things.

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.

The only way a maximizer can “really love” a clothing item is by knowing that there isn’t a better alternative out there somewhere.

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.

Choice is what enables us to tell the world who we are and what we care about.

An illustration of the expressive function of voting is the story of two American political scientists who were in Europe on election day. They took a three-hour drive together to cast their absentee ballots, knowing they supported opposing candidates and that their votes would cancel each other out.

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. So it is not an exaggeration to say that our most fundamental sense of well-being crucially depends on our having the ability to exert control over our environment and recognizing that we do.

as the experience of choice and control gets broader and deeper, expectations about choice and control may rise to match that experience.

more choice may not always mean more control. Perhaps there comes a point at which opportunities become so numerous that we feel overwhelmed. Instead of feeling in control, we feel unable to cope. Having the opportunity to choose is no blessing if we feel we do not have the wherewithal to choose wisely. Remember the survey that asked people whether they would want to choose their mode of treatment if they got cancer? The majority of respondents to that question said yes. But when the same question was asked of people who actually had cancer, the overwhelming majority said no. What looks attractive in prospect doesn’t always look so good in practice.

To avoid the escalation of such burdens, we must learn to be selective in exercising our choices. We must decide, individually, when choice really matters and focus our energies there, even if it means letting many other opportunities pass us by.

And one of the things these surveys tell us is that, not surprisingly, people in rich countries are happier than people in poor countries. Obviously, money matters. But what these surveys also reveal is that money doesn’t matter as much as you might think. Once a society’s level of per capita wealth crosses a threshold from poverty to adequate subsistence, further increases in national wealth have almost no effect on happiness. You find as many happy people in Poland as in Japan, for example, even though the average Japanese is almost ten times richer than the average Pole.

In the last forty years, the per capita income of Americans (adjusted for inflation) has more than doubled. The percentage of homes with dishwashers has increased from 9 percent to 50 percent. The percentage of homes with clothes dryers has increased from 20 percent to 70 percent. The percentage of homes with air-conditioning has increased from 15 percent to 73 percent. Does this mean we have more happy people? Not at all. Even more striking, in Japan, per capita wealth has increased by a factor of five in the last forty years, again with no measurable increase in the level of individual happiness.

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. But a word of caution is in order. We know with certainty that there is a relation between being able to connect socially and being happy. It is less clear, however, which is the cause and which is the effect. Miserable people are surely less likely than happy people to have close friends, devoted family, and enduring marriages.

We earn more and spend more, but we spend less time with others. More than a quarter of Americans report being lonely, and loneliness seems to come not from being alone, but from lack of intimacy. We spend less time visiting with neighbors. We spend less time visiting with our parents, and much less time visiting with other relatives.

“What was once given by neighborhood and work now must be achieved; people have had to make their own friends…and actively cultivate their own family connections.” In other words, our social fabric is no longer a birthright but has become a series of deliberate and demanding choices.

BEING SOCIALLY CONNECTED TAKES TIME.

When family, friends, fellow congregants need us, we have to be there. When disagreements or conflicts arise, we have to stay in the game and work them out. And the needs of friends and family don’t arise on a convenient schedule, to be penciled into our day planner or Palm Pilot. They come when they come, and we have to be ready to respond.

Time is the ultimate scarce resource, and for some reason, even as one “time-saving” bit of technology after another comes our way, the burdens on our time seem to increase. Again, it is my contention that a major contributor to this time burden is the vastly greater number of choices we find ourselves preparing for, making, reevaluating, and perhaps regretting.

Time spent dealing with choice is time taken away from being a good friend, a good spouse, a good parent, and a good congregant.

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.

Having the discipline to live by the rules you make for yourself is, of course, another matter, but one thing’s for sure: following rules eliminates troublesome choices in your daily life, each time you get into a car or each time you go to a cocktail party.

Presumptions are less stringent than rules. Presumptions are like the default settings on computer applications.

Standards are even less rigorous than rules or presumptions. When we establish a standard, we are essentially dividing the world of options into two categories: options that meet the standard and options that don’t.

We are drawn to people who meet our standards (of intelligence, kindness, character, loyalty, wit), and then we stick with them. We don’t make a choice, every day, about whether to maintain the friendship; we just do.

Jacob von Uexkull, observing how evolution shaped organisms so that their perceptual and behavioral abilities were precisely attuned to their survival, remarked that “security is more important than wealth.” In other words, a squirrel in the wild doesn’t have the “wealth” of experience and of choice that people do when they decide to take a walk in the forest. What the squirrel does have is the “security” that it will notice what matters most and know how to do what it needs to do to survive, because biology supplies the needed constraints on choice. It helps organisms recognize food, mates, predators, and other dangers, and it supplies them with a small set of activities appropriate for obtaining what they truly need. For people, such constraints have to come from culture.