The Paradox of Choice
Today, I link to a video by Barry Schwartz on the paradox of choice. I chose the video because as investors we must navigate a universe of financial products and it can be downright confusing to decide where to allocate capital. Warren Buffett has a simple solution to this problem “stick within your circle of competence”. (Click here to watch the video and skip the introduction)
Video Introduction (Via TED)
In his 2004 book The Paradox of Choice , Barry Schwartz tackles one of the great mysteries of modern life: Why is it that societies of great abundance — where individuals are offered more freedom and choice (personal, professional, material) than ever before — are now witnessing a near-epidemic of depression? Conventional wisdom tells us that greater choice is for the greater good, but Schwartz argues the opposite: He makes a compelling case that the abundance of choice in today’s western world is actually making us miserable.
Infinite choice is paralyzing, Schwartz argues, and exhausting to the human psyche. It leads us to set unreasonably high expectations, question our choices before we even make them and blame our failures entirely on ourselves. His relatable examples, from consumer products (jeans, TVs, salad dressings) to lifestyle choices (where to live, what job to take, who and when to marry), underscore this central point: Too much choice undermines happiness.
Background On Barry Schwartz (Via Wikipedia)
Barry Schwartz is an American psychologist. Schwartz is the Dorwin Cartwright Professor of Social Theory and social action at Swarthmore College. He frequently publishes editorials in the New York Times applying his research in psychology to current events.