Decision Making Under Alternatives
If you enjoyed reading the Paradox of Choice this paper highlights some interesting experiments analyzing decision making under alternatives
Abstract (Via Reutskaja)
Whereas people are typically thought to be better off with more choices, studies show that they often prefer to choose from small as opposed to large sets of alternatives. We propose that satisfaction from choice is an inverted U-shaped function of the number of alternatives. This proposition is derived theoretically by considering the benefits and costs of different numbers of alternatives and is supported by four experimental studies. We also manipulate the perceptual costs of information processing and demonstrate how this affects the resulting “satisfaction function.” We further indicate that satisfaction when choosing from a given set is diminished if people are made aware of the existence of other choice sets. The role of individual differences in satisfaction from choice is documented by noting effects due to gender and culture. We conclude by emphasizing the need to have an explicit rationale for knowing how much choice is “enough.”
Introduction (Via Reutskaja)
Recent research has drawn attention to the fact that, in today’s world, people often face an embarrassment of riches in the form of the numbers of alternatives available for decisions involving both small and large stakes, e.g., from chocolates and yogurts to health plans and pension schemes. And yet, although both economic theory and the psychological literature emphasize that people are better off with more choice (see, e.g., Langer & Rodin, 1976; Zuckerman et al., 1978; Ryan & Deci, 2000), having many alternatives can be dysfunctional (Schwartz, 2000; 2004; Iyengar, Wells, & Schwartz, 2006). Rather than choosing from many alternatives, people sometimes forego or delay decisions even though this can be costly (Iyengar, Huberman, & Jiang, 2004). At the same time, some studies report greater satisfaction when choice involves limited numbers of alternatives (say six as opposed to thirty, Iyengar & Lepper, 2000).