The Choice Overload Problem:

ESSAYS

Dan Burgess-Milne is a guest contributing writer, you can contact him at dancherishnz@gmail.com 

“Counselling centers, psych services centers, and universities are bursting at the seams. Why? These are the most privileged kids ever. The schools are giving them everything they could possibly want, and they are banging down the doors because they're so screwed up. Why? What's going on? An answer is people don't know what to do. They don't know how to choose. They can't face a world in which everything is available. And I see this in the college; it's heartbreaking to see these incredibly talented college seniors, who we have given every opportunity to do whatever they want, terrified at graduation. They know that this is a stage in life where walking through one door means they’re going to hear a lot of other doors slam shut. They can't bear the thought that they may walk through the wrong door.” - Barry Schwartz 

We live in a culture that values freedom of the individual above all else. In our culture of independence and individualism we see value for things like self determination, individual rights, and freedom of choice. In cultures with more of a collectivistic paradigm, we see value for things like social conformity, duty, and responsibility. Without us being aware of our cultural paradigms, they create a lens in which we interpret all phenomena around us. 

We have a cultural belief that increasing an individual’s choices is synonymous with freedom and therefore universally desirable and advantageous. Our markets are flooded with multitudes of consumer choices. A trip to the supermarket reveals countless options for all products—5 different types of apples, 20 flavours of potato chips, 30 different cereals, 5 different supermarkets to choose from—choice is abundant.  Starbucks once had a slogan that read “Happiness is in your choices”, and in the ever-expanding culture of the spiritual consumer, we see this same sentiment repurposed for the market to read ‘happiness is a choice’. The very idea of happiness itself is linked to our cultural value of choice—happiness arises when we have multitudes of choice, and then choose correctly from the given options. 

If this were universally true rather than a product of a paradigmatic lens, then we should be able to find a universal embracing of an increase in choice, complemented by a corresponding increase in happiness. Below are some quotes from Eastern Europeans in formerly communist countries experiencing the sudden increase in consumer products on the market: 

“for me it (the association) is fear. There are some dilemmas, you see. I am used to no choice.” 

“It is too much. We do not need everything that is there.” 

“I do not need 20 kinds of chewing gum. I don't mean to say that I want no choice. But many of these choices are quite artificial.” 

And it seems that even in the West, our actual consumer choices don’t correlate with our assumptions about choice either. When Procter & Gamble went from 26 different kinds of Head & Shoulders to 15, they saw an increase in sales by 10 percent. When the Golden Cat Corporation got rid of their 10 worst-selling cat litter products, they saw an increase in profits by 87 percent. A reduction in the choices available seems to have led to more engagement and more decisions being made. 

This is illustrated clearly in the following example. Two tasting booths for jam were set up on different days. One had 6 flavours of jam, the other 24. 60% of customers stopped to try jam when there were 24 options, compared to only 40% with 6 options. However, only 3% of the people who stopped to sample from the range of 24 went on to buy a jam, when 30% of people with only 6 jams options purchased jam. This corresponded to a 6x increase in purchases from those presented with a smaller range of options. The allure of the many options drew people’s attention, but actually led to less actioning than the reduced options. 

This is what is called the choice overload problem. When we are presented with too many choices of relatively equal options, the process becomes mentally draining. The human brain can process roughly 7 different options in any given situation if they are differentiated by a constant variable. Any more than this and we begin to experience cognitive overload, resulting in a negative effect on our ability to make good decisions and, perhaps more importantly, on our satisfaction with the decisions we make. 

A measurement of satisfaction of the decision-making process can be described by an inverted “U” model. Having no choice at all results in low satisfaction. Initially more choices will lead to an increase in satisfaction, but as the number of choices grows, satisfaction begins to drop as people feel pressure, confusion, and ultimately dissatisfaction with their choices. In a situation with an overwhelming amount of options, a person may experience analysis paralysis, when the fear of making the wrong choice (or the fear of loss from eliminating options) outweighs the feeling of value from having made a specific choice. This leads to a situation in which it feels cognitively more advantageous to make no decision at all. 

Here is an anecdote from Dan Ariely that clearly illustrates the effects of analysis paralysis, even when decisions increase in complexity by minor amounts: 

“...They took a group of physicians. They presented to them a case study of a patient. They said, "Here is a patient. He is a 67-year-old farmer. He's been suffering from right hip pain for a while...You decided a few weeks ago that nothing is working for this patient... So you refer the patient for hip replacement therapy..." So the patient is on a path to have his hip replaced. Then they said to half of the physicians, "Yesterday, you reviewed the patient's case, and you realised that you forgot to try one medication. You did not try ibuprofen. What do you do? Do you pull the patient back and try ibuprofen? Or do you let him go and have the hip replacement?" Well, the good news is that most physicians in this case decided to pull the patient and try ibuprofen. Very good for the physicians. 

To the other group of physicians, they said, "Yesterday when you reviewed the case, you discovered there were two medications you didn't try out yet – ibuprofen and piroxicam." You have two medications you didn't try out yet. What do you do? You let him go, or you pull him back? And if you pull him back, do you try ibuprofen or piroxicam? Which one?" Now, think of it: This decision makes it as easy to let the patient continue with hip replacement, but pulling him back, all of a sudden it becomes more complex. There is one more decision. What happens now? The majority of the physicians now choose to let the patient go for a hip replacement.” 

So we have on our hands a conundrum. On the one hand we have a belief that increasing choice is of net benefit, and on the other hand we have an inability to make effective decisions (or any decision at all) when the choice becomes too complex. This results in a cognitive process to help us reduce the complexity of the situation that we are often performing unconsciously called bounded rationality. If we can‘t reduce the amount of options, we can instead change the scope of the reference that we are generating the decision in relation to. 

Imagine you have a data processor that can process 10 bits of information in any given moment. You want to decide which meal you’re going to eat for dinner based on taste and nutritional value. If you give the processor 5 different meal options, it can process both taste and nutritional value for all 5 options, as there are 2 bits of data for each meal. It can then give you an answer taking both taste and nutritional value into consideration. If you now give the processor 10 different meal options, the processor can’t process 20 bits of information, so if it tries to process taste and nutritional data simultaneously, it will explode. Instead, it can consider one factor from the 10 options, say taste, and then provide you with an answer based purely on taste alone. Which decision-making process has generated the best outcome? 

The majority of our problems are paradigmatic at their root. We seek to increase choice because we believe that more choice equals better outcomes, however in response to greater choice we reduce the rationality that we employ to discern the best outcome. Outcomes are seldom improved by the increase in choice, but our assumption that they should improve leads to us blaming ourselves for the poor outcomes.