Too Many Choices - a Problem That Can Paralyze a Customer

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“Too Many Choices: A Problem That Can Paralyze a Customer”

February 27, 2010, on page B5 of the New York Times.

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Too Many Choices: A Problem That Can Paralyze

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Jack Atley/Bloomberg News

The salad options at a Woolworths supermarket in Sydney, Australia. Too many choices can trouble consumers.

By ALINA TUGEND

Published: February 26, 2010

TAKE my younger son to an ice cream parlor or restaurant if you really want to torture him. He has to make a choice, and that’s one thing he hates. Would chocolate chip or coffee chunk ice cream be better? The cheeseburger or the turkey wrap? His fear, he says, is that whatever he selects, the other option would have been better.

Gabriel is not alone in his agony. Although it has long been the common wisdom in our country that there is no such thing as too many choices, as psychologists and economists study the issue, they are concluding that an overload of options may actually paralyze people or push them into decisions that are against their own best interest.

There is a famous jam study (famous, at least, among those who research choice), that is often used to bolster this point. Sheena Iyengar, a professor of business at Columbia University and the author of “The Art of Choosing,” (Twelve) to be published next month, conducted the study in 1995.

In a California gourmet market, Professor Iyengar and her research assistants set up a booth of samples of Wilkin & Sons jams. Every few hours, they switched from offering a selection of 24 jams to a group of six jams. On average, customers tasted two jams, regardless of the size of the assortment, and each one received a coupon good for $1 off one Wilkin & Sons jam.

Here’s the interesting part. Sixty percent of customers were drawn to the large assortment, while only 40 percent stopped by the small one. But 30 percent of the people who had sampled from the small assortment decided to buy jam, while only 3 percent of those confronted with the two dozen jams purchased a jar.

That study “raised the hypothesis that the presence of choice might be appealing as a theory,” Professor Iyengar said last year, “but in reality, people might find more and more choice to actually be debilitating.”

Over the years, versions of the jam study have been conducted using all sorts of subjects, like chocolate and speed dating.

But Benjamin Scheibehenne, a research scientist at the University of Basel in Switzerland, said it might be too simple to conclude that too many choices are bad, just as it is wrong to assume that more choices are always better. It can depend on what information we’re being given as we make those choices, the type of expertise we have to rely on and how much importance we ascribe to each choice.

Mr. Scheibehenne recently co-wrote an analysis, to be published in October in The Journal of Consumer Research, examining dozens of studies about choices. One problem, he said, is separating the concept of choice overload from information overload.

In other words, he said, how much are people affected by the number of choices and “how much from the lack of information or any prior understanding of the options?”

I know this from experience. A while back, I spent a great deal of time trying to decide which company should provide our Internet, phone and television cable service. I was looking at only two alternatives, but the options — cost, length of contract, present and future discounts, quality of service — made the decision inordinately difficult.

This was not only because I wanted to get the best deal, but because the information from the companies was overly complicated and vague. I suspected that both companies were less interested in my welfare than in getting my money — and I didn’t want to be a sucker. This was a problem partly of choice overload — too many options — but also of poor information.

Research also shows that an excess of choices often leads us to be less, not more, satisfied once we actually decide. There’s often that nagging feeling we could have done better.

Understanding how we choose could guide employers and policy makers in helping us make better decisions. For example, most of us know that it’s a wise decision to save in a401(k). But studies have shown that if more fund options are offered, fewer people participate. And the highest participation rates are among those employees who are automatically enrolled in their company’s 401(k)’s unless they actively choose not to.

This is a case where offering a default option of opting in, rather than opting out (as many have suggested with organ donations as well) doesn’t take away choice but guides us to make better ones, according to Richard H. Thaler, an economics professor at the Booth School of Business at the University of Chicago, and Cass R. Sunstein, a professor at Chicago’s law school, who are the authors of “Nudge: Improving Decisions About Health, Wealth and Happiness” (Yale University Press, 2008). Making choices can be most difficult in the area of health. While we don’t want to go back to the days when doctors unilaterally determined what was best, there may be ways of changing policy so that families are not forced to make unbearable choices.

Professor Iyengar and some colleagues compared how American and French families coped after making the heart-wrenching decision to withdraw life-sustaining treatment from an infant. In the United States, parents must make the decision to end the treatment, while in France, the doctors decide, unless explicitly challenged by the parents.

This contrast in the “choosing experience,” she wrote, made a difference in how the families later coped with their decisions.

French families weren’t as angry or confused about what had happened, and focused much less on how things might have been or should have been than the American parents.

It is important to note that no one is suggesting that parents be kept out of the loop in such a crucial