I meant to make a note of Barry Schwartz’s The Paradox of Choice a while ago, and was reminded of it as it’s now in paperback. The New Yorker review is, as usual, the best introduction to the topic. Excerpts:
As Herbert Simon, the 1978 Nobel laureate in economics, observed, any firm that tried to make decisions that would â€œmaximizeâ€ its returns would bankrupt itself in a never-ending search for the best option. What firms do instead is â€œsatisfice,â€ to use Simonâ€™s term: they content themselves with results that are â€œgood enough.â€ Schwartz, who is a close reader of Simon, worries that the profusion of choices we faceâ€”a hundred varieties of bug spray, breakfast cereal, extra-virgin olive oilâ€”is turning us into maximizers, and maximizers, he thinks, are prone to misery and depression.
Daniel Kahneman and the late Amos Tversky… once asked subjects whether theyâ€™d prefer to be making thirty-five thousand dollars a year while those around them were making thirty-eight thousand or thirty-three thousand while those around them were making thirty thousand. They answered, in effect, that it depends on what the meaning of the word â€œpreferâ€ is. Sixty-two per cent said theyâ€™d be happier in the latter case, but eighty-four per cent said theyâ€™d choose the former.
In a study conducted several years ago, shoppers who were offered free samples of six different jams were more likely to buy one than shoppers who were offered free samples of twenty-four. …Schwartz suggests that it has to do with the irrational way people measure â€œopportunity costs.â€ Instead of calculating opportunity cost as the value of the single most attractive foregone alternative, we seem to assemble an idealistic composite of all the options foregone.
There are even cases, as Schwartz notes, where just one additional choice can produce outright paralysis. Tversky and the young Princeton psychologist Eldar Shafir asked experimental subjects how they would react to a desirable Sony appliance placed in a shopwindow, radically marked down. The offer met with predictable enthusiasm. When a second appliance, similarly marked down, was placed alongside the bargain Sony, enthusiasmâ€”and salesâ€”dropped. Some hypothetical customers were evidently frozen by indecision.
What about the other approachâ€”trying to choose less? In some measure, we all do this, using a strategy that the Columbia social theorist Jon Elster calls â€œself-binding.â€ Gilbert and Wilson note that there is one exception to the rule that hungry people overbuy and sated people underbuy at supermarkets: itâ€™s people who bring a grocery list, which the two psychologists call â€œa copy of A Theory About What I Will Want in the Future.â€
People are consistently puzzled that so many things they had dreadedâ€”from getting fired to being ditched by a spouseâ€”â€œturned out for the best.â€ …A tendency to overestimate the joy weâ€™ll get from buying baubles and winning honors is only half of a complex predisposition. The other half is our enormous capacity for happiness, even in the absence of such things. The surprise isnâ€™t how often we make bad choices; the surprise is how seldom they defeat us.