The Paradox of Choice: Why More Is Less

by Barry Schwartz

PART OF THE DOWNSIDE of abundant choice is that each new option adds to the list of trade-offs, and trade-offs have psychological consequences. The necessity of making trade-offs alters how we feel about the decisions we face; more important, it affects the level of satisfaction we experience from the decisions we ultimately make.

THE QUALITY OF ANY GIVEN OPTION cannot be assessed in isolation from its alternatives. One of the “costs” of any option involves passing up the opportunities that a different option would have afforded. This is referred to as an opportunity cost.

According to standard economic assumptions, the only opportunity costs that should figure into a decision are the ones associated with the next-best alternative.

Pay attention to what you’re giving up in the next-best alternative, but don’t waste energy feeling bad about having passed up an option further down the list that you wouldn’t have gotten to anyway.

If we assume that opportunity costs take away from the overall desirability of the most-preferred option and that we will feel the opportunity costs associated with many of the options we reject, then the more alternatives there are from which to choose, the greater our experience of the opportunity costs will be. And the greater our experience of the opportunity costs, the less satisfaction we will derive from our chosen alternative.

The existence of multiple alternatives makes it easy for us to imagine alternatives that don’t exist—alternatives that combine the attractive features of the ones that do exist. And to the extent that we engage our imaginations in this way, we will be even less satisfied with the alternative we end up choosing.

Difficult trade-offs make it difficult to justify decisions, so decisions are deferred; easy trade-offs make it easy to justify decisions. And single options lie somewhere in the middle.

There is another, more urgent example of how conflict induces people to avoid decisions. In this study, doctors were presented with a case history of a man suffering from osteoarthritis and asked whether they would prescribe a new medication or refer the patient to a specialist. Almost 75 percent recommended the medication. Other doctors were presented with a choice between two new medications or referral to a specialist. Now only 50 percent went with either of the medications, meaning that the percentage of those referring doubled. Referral to a specialist is, of course, a way to avoid a decision.

People find decision making that involves trade-offs so unpleasant that they will clutch at almost anything to help them decide.

The emotional cost of potential trade-offs does more than just diminish our sense of satisfaction with a decision. It also interferes with the quality of decisions themselves.

We seem to do our best thinking when we’re feeling good. Complex decisions, involving multiple options with multiple features (like “Which job should I take?”) demand our best thinking. Yet those very decisions seem to induce in us emotional reactions that will impair our ability to do just the kind of thinking that is necessary.

Even decisions as trivial as renting a video become important if we believe that these decisions are revealing something significant about ourselves.

AS THE STAKES OF DECISIONS RISE, WE FEEL AN INCREASED NEED TO justify them. We feel compelled to articulate—at least to ourselves—why we made a particular choice. This need to search for reasons seems useful; it ought to improve the quality of our choices. But it doesn’t necessarily.

We can assume that having a good sense of this—of what’s good and what’s bad—was essential for survival. But distinguishing between good and bad is a far simpler matter than distinguishing good from better from best. After millions of years of survival based on simple distinctions, it may simply be that we are biologically unprepared for the number of choices we face in the modern world.

What emerged from the findings was that, while participants valued being able to reverse their choices, almost no one actually did so. However, those who had the option to change their minds were less satisfied with their choices than participants who did not have that option. And, perhaps most important, the participants had no idea that keeping the option open to change their minds would affect their satisfaction with the things they chose.

Most of us seem to share the intuition that we regret actions that don’t turn out well more than we regret failures to take actions that would have turned out well. This is sometimes referred to as an omission bias, a bias to downplay omissions (failures to act) when we evaluate the consequences of our decisions. However, recent evidence indicates that acts of commission are not always more salient than acts of omission. The omission bias undergoes a reversal with respect to decisions made in the more distant past. When asked about what they regret most in the last six months, people tend to identify actions that didn’t meet expectations. But when asked about what they regret most when they look back on their lives as a whole, people tend to identify failures to act. In the short run, we regret a bad educational choice, whereas in the long run, we regret a missed educational opportunity. In the short run, we regret a broken romance, whereas in the long run, we regret a missed romantic opportunity. So it seems that we don’t close the psychological door on the decisions we’ve made, and as time passes, what we’ve failed to do looms larger and larger.

Bronze medalists are happier than silver medalists. As the silver medalists stand on the award platform, they’re thinking about how close they came to winning the gold. Just a little more of this, and a little less of that, and ultimate glory would have been theirs. As the bronze medalists stand on that platform, however, they’re thinking about how close they came to getting no medal at all.

When confronted with a choice between a job that offers the possibility of rapid advancement and a job that offers congenial workmates, I can easily imagine finding a job that has both. This ability to conjure up ideal scenarios provides a never-ending supply of raw material for experiencing regret. Thinking about the world as it isn’t, but might be or might have been, is called counterfactual thinking.

When a student who didn’t study much does badly on an exam, he could and should take responsibility for not having studied more. But the exam could have been easier, or it could have been more focused on material that the student knew well. The fact that counterfactual thinking seems to hone in on the controllable aspects of a situation only increases the chances that a person will experience regret when engaging in counterfactual thinking.

Upward counterfactuals are imagined states that are better than what actually happened, and downward counterfactuals are imagined states that are worse.

So generating downward counterfactuals might engender not only a sense of satisfaction, but a sense of gratitude that things didn’t turn out worse. What studies have shown, however, is that people rarely produce downward counterfactuals unless asked specifically to do so. There is an important lesson to be taken from this research on counterfactual thinking, and it’s not that we should stop doing it; counterfactual thinking is a powerful intellectual tool. The lesson is that we should try to do more downward counterfactual thinking. While upward counterfactual thinking may inspire us to do better the next time, downward counterfactual thinking may induce us to be grateful for how well we did this time. The right balance of upward and downward counterfactual thinking may enable us to avoid spiraling into a state of misery while at the same time inspiring us to improve our performance.

By thinking about what you will give up by going to the seaside, by imagining opportunity costs in advance, it seems inevitable that the anticipated regret induced by these thoughts will make the most attractive option seem less attractive. Sure, you may still decide to go to the beach, but not with quite the same enthusiasm.

Not surprisingly, when confronted with decisions, we often choose the option that minimizes the chances that we will experience regret.

Taking the sure thing is a way to guarantee that you won’t regret your decision—you won’t regret it because you’ll never know how the alternative would have turned out.

We show greater willingness to take risks when we know we will find out how the unchosen alternative turned out and there is thus no way to protect ourselves from regret.

If you’re trying to decide whether to buy a Toyota Camry or a Honda Accord and your closest friend just bought an Accord, you’re likely to buy one too, partly because the only way to avoid the information that you made a mistake is to buy what your friend bought and thus avoid potentially painful comparisons.

Another effect that the desire to avoid regret can have is to induce people not to act at all, what is called inaction inertia. Imagine being in the market for a sofa and seeing one you like on sale for 30 percent below list price. It’s fairly early in your search, and you think that you may be able to do better, so you pass up the sale. Several weeks of shopping fail to turn up anything better, so you go back to buy the one you saw earlier. The trouble is that now it’s selling for 10 percent off list price. Do you buy it? For many shoppers, the answer is no. If they buy it, there will be no way to avoid regretting not having bought it earlier. If they don’t buy it, they still keep the possibility alive that they’ll find something better.

That happens a lot :-(

What leads me to believe that sunk-cost effects are motivated by the desire to avoid regret rather than just the desire to avoid a loss is that sunk-cost effects are much bigger when a person bears responsibility for the initial decision

He gives as an example of sunk costs the war in Vietnam in which the US stayed in part so that soldiers that have died wouldn't have died in vain even though no good was going to come out of this war.

When there are many options, the chances increase that there is a really good one out there, and you feel that you ought to be able to find it. When the option you actually settle on proves disappointing, you regret not having chosen more wisely. And as the number of options continues to proliferate, making an exhaustive investigation of the possibilities impossible, concern that there may be a better option out there may induce you to anticipate the regret you will feel later on, when that option is discovered, and thus prevent you from making a decision at all.

When considering a decision involving complex possibilities, the fact that there is no one option that is best in all respects will induce people to consider the opportunity costs associated with choosing the best option. And the more options there are, the more likely it is that there will be some that are better in certain respects than the chosen one. So opportunity costs will mount as the number of options increases, and as opportunity costs mount, so will regret.

This ubiquitous feature of human psychology is a process known as adaptation. Simply put, we get used to things, and then we start to take them for granted.

When it first became possible to get a wide variety of fruits and vegetables at all times of year, I thought I’d found heaven. Now I take this year-round bounty for granted and get annoyed if the nectarines from Israel or Peru that I can buy in February aren’t sweet and juicy.

Human beings, Scitovsky said, want to experience pleasure. And when they consume, they do experience pleasure—as long as the things they consume are novel. But as people adapt—as the novelty wears off—pleasure comes to be replaced by comfort. It’s a thrill to drive your new car for the first few weeks; after that, it’s just comfortable. It certainly beats the old car, but it isn’t much of a kick. Comfort is nice enough, but people want pleasure. And comfort isn’t pleasure. The result of having pleasure turn into comfort is disappointment, and the disappointment will be especially severe when the goods we are consuming are “durable” goods, such as cars, houses, stereo systems, elegant clothes, jewelry, and computers.

respondents were asked to predict how various personal and environmental changes would affect their well-being over the next decade. Individuals were asked about changes in air pollution, rain-forest destruction, increased numbers of coffee shops and TV channels, decreased risk of nuclear war, increased risk of AIDS, development of chronic health conditions, changes in income, and increases in body weight. Others were asked not to predict how these changes would make them feel, but to describe how these changes had made them feel over the last decade (to the extent that they applied in each individual case). The pattern of results was clear: those predicting expected each of the hypothetical changes—both good and bad—to have a bigger effect than was reported by those reflecting back on actual experience.

Even with adaptation in mind, the predictors substantially overestimated how good a positive decision would make them feel and how bad a negative decision would make them feel in the long run.

Almost every decision we make involves a prediction about future emotional responses. When people marry, they are making predictions about how they will feel about their spouse. When they have children, they are making predictions about their enduring feelings about family life. When they embark on a long course of graduate or professional training, they are making predictions about how they’ll feel about school and how they’ll feel about work. When people move from the city to a suburb, they’re making predictions about how it will feel to cut the grass and be tied to their cars. And when they buy a car or a stereo or anything else, they are predicting how it will feel to own and use that product in the months and years ahead. If people err systematically and substantially in making those predictions, it’s likely that they will make some bad decisions—decisions that produce regret, even when events turn out well.

Time, effort, opportunity costs, anticipated regret, and the like are fixed costs that we “pay” up front in making a decision, and those costs then get “amortized” over the life of the decision. If the decision provides substantial satisfaction for a long time after it is made, the costs of making it recede into insignificance. But if the decision provides satisfaction for only a short time, those costs loom large. Spending four months deciding what stereo to buy isn’t so bad if you really enjoy that stereo for fifteen years. But if you end up being excited by it for six months and then adapting, you may feel like a fool for having put in all that effort.

when we are making decisions, we should think about how each of the options will feel not just tomorrow, but months or even years later. Factoring in adaptation to the decision-making process may make differences that seem large at the moment of choice feel much smaller. Factoring in adaptation may help us be satisfied with choices that are good enough rather than “the best,” and this in turn will reduce the time and effort we devote to making those choices.

As our material and social circumstances improve, our standards of comparison go up. As we have contact with items of high quality, we begin to suffer from “the curse of discernment.” The lower quality items that used to be perfectly acceptable are no longer good enough. The hedonic zero point keeps rising, and expectations and aspirations rise with it.

So, one might wonder "is change bad, or mostly pointless?".

Overall, 43 percent of the respondents said they were having a harder time than their parents did, but 50 percent of children from affluent households said their lives were harder. When probed, the teenagers from affluent households talked about high expectations, both their own and their parents’. They talked about “too-muchness”: too many activities, too many consumer choices, too much to learn. Whereas teens from low-income households talked about how much easier it was to get schoolwork done thanks to computers and the Internet, teens from high-income homes talked about how much had to be sifted through because of computers and the Internet. As one commentator put it, “Children feel the pressure…to be sure they don’t slide back. Everything’s about going forward…. Falling back is the American nightmare.”

in this age of unparalleled longevity and control over disease, there is also unparalleled anxiety about health. Americans expect to live even longer yet, and to do so without any diminution of capacity. So though modern health practices help extend our lives, they don’t seem to provide an appropriate degree of satisfaction.

When I was away on vacation a few years ago in a tiny seaside town on the Oregon coast, I went into the small local grocery store to buy some ingredients for dinner. When it came to buying wine, they had about a dozen options. What I got wasn’t very good, but I didn’t expect to be able to get something very good, and so I was satisfied with what I got. If instead I’d been shopping in a store that offered hundreds—even thousands—of options, my expectations would have been a good deal higher. Had I ended up choosing a bottle of wine of the same quality as the one that satisfied me in Oregon, I’d have been sorely disappointed.

The lesson here is that high expectations can be counterproductive. We probably can do more to affect the quality of our lives by controlling our expectations than we can by doing virtually anything else. The blessing of modest expectations is that they leave room for many experiences to be a pleasant surprise, a hedonic plus. The challenge is to find a way to keep expectations modest, even as actual experiences keep getting better. One way of achieving this goal is by keeping wonderful experiences rare. No matter what you can afford, save great wine for special occasions. No matter what you can afford, make that perfectly cut, elegantly styled, silk blouse a special treat. This may seem like an exercise in self-denial, but I don’t think it is. On the contrary, it’s a way to make sure that you can continue to experience pleasure. What’s the point of great meals, great wines, and great blouses if they don’t make you feel great?

Our answer to the “How am I doing?” question depends on our own past experiences, aspirations, and expectations, but the question is virtually never asked or answered in a social vacuum. “How am I doing?” almost always carries “compared to others” in parentheses. Social comparison provides information that helps people evaluate experiences. Many experiences are ambiguous enough that we aren’t completely sure what to make of them. Is a B+ a good grade on an exam? Is your marriage going well? Is there reason to worry because your teenage son is into head-banging music? Are you sufficiently valued at work? Although it is possible to derive approximate answers to questions like these without looking around at others, approximate answers aren’t good enough. Looking at others permits the fine-tuning of assessments.

So instead of comparing ourselves to everyone, we try to mark off the world in such a way that in our pond, in comparison with our reference group, we are successful. Better to be the third-highest-paid lawyer in a small firm and make $120,000 a year than to be in the middle of the pack in a large firm and make $150,000. The way to be happy—the way to succeed in the quest for status—is to find the right pond and stay in it.

In most cases, more than half of the respondents chose the options that gave them better relative position.

people were asked to choose between earning $50,000 a year with others earning $25,000 and earning $100,000 a year with others earning $200,000. They were asked to choose between 12 years of education (high school) when others have 8, and 16 years of education (college) when others have 20. They were asked to choose between an IQ of 110 when the IQ of others is 90 and an IQ of 130 when the IQ of others is 150.

It’s like being in a crowded football stadium, watching the crucial play. A spectator several rows in front stands up to get a better view, and a chain reaction follows. Soon everyone is standing, just to be able to see as well as before. Everyone is on their feet rather than sitting, but no one’s position has improved. And if someone, unilaterally and resolutely, refuses to stand, he might just as well not be at the game at all. When people pursue goods that are positional, they can’t help being in the rat race. To choose not to run is to lose.

Lyubomirsky developed a questionnaire, which you’ll find on page 196, designed to measure what might be called people’s chronic level of happiness (as opposed to their moods at a particular moment in time) to categorize participants as relatively happy or unhappy.

Lyubomirsky found that happy people were only minimally affected by whether the person working next to them was better or worse at the anagram task than they were.

Thus it seemed as though the only thing that mattered to the unhappy people was how they did in comparison to their partner. Better to be told that you’re a pretty bad teacher but that others are even worse than to be told that you’re a pretty good teacher, but others are better.