The Tyranny of Choice?
How business fads begin: modest scientific paper with interesting ‘discovery’; newspaper report; consultant interest and story-telling; simplification; assertions that using the fad idea/process leads to high profitability, sustainable growth, competitive advantage. ‘Fadification’ leading, in time, to disillusion and a search for the next magic bullet.
Could this happen in the serious, but becoming ever more sexy, world of Behavioural Economics? Over a dozen years ago, two social psychologists published a modest paper with the subtitle “Can one desire too much of a good thing?” They set up a jam-tasting table at the entrance to a posh food shop. People were offered a coupon for a discount on the jams. There were two conditions: either there were 6 samples of jam or 24. As they predicted, more people came to look when there were more jams. But, and here’s the counter-intuitive bit, 10 times as many actually bought a jar of jam when only 6 were on display as opposed to four times that number (30% vs. 3% bought).
The interpretation was that choice overload decreased the motivation to choose. There is a paradox, you see. Though it may be attractive to have a lot of choice, it causes problems.
In a second study the intrepid psychologists offered people a tasting of an exotic chocolate. Again, they had to choose from an array of 6 or 24, but this time the issue was their rating of the quality of the choccies. And yes, you are right: those with more choice were less satisfied. Further, four times as many accepted a box of chocolates for payment in the study if they were in the less (fewer), rather than in the more (greater) choice condition.
Quirky, daft, naïve Americans? No, when repeated in Europe there was a similar effect. Did it only work for foodstuffs? No, it worked on other things such as pens and gift boxes. So this phenomenon needed a name and the academics were not slow at coming forward: ‘choice overload’; ‘overchoice effect’; ‘the tyranny of choice’; and ‘consumer hyperchoice’. The news was out: there were adverse consequences of giving people too much choice. Less is more…but we knew that, didn’t we?
The consultants and trainers stole each others’ stories and slides. And they noticed the effect all around them: cheap shoe shops were piled high with boxes; posh shops displayed fewer than a dozen. Small local corner shops, weighed down with magazines and confectionery, seemed to sell less of those two items than people in kiosks offering a fifth of the choice.
But while the fad spread, researchers continued to investigate the effect. Ernest PhD students cut their teeth on investigating the “when, why and how” of this paradox. By 2010 there were 50 published studies on the topic. This called for a meta-analysis: a way of comparing the results of all the studies. And yes, you guessed it. Around a third of the studies found evidence of the overchoice effect, though not as big as first reported. A third found that options made little difference and a third found the opposite effect. Oh dear…not so simple after all.
The meta-analysis published in the Journal of Consumer Research (vol 37, pp 409-425) seems not to have put off those dedicated to the choice overload story. These meta-analyses are, however, extremely important in trying to discover what the scientists variously call confounding, moderating or mediating effects. And the story is always more complicated than the storytellers would have us believe.
First, it was established that if people had prior preferences and knowledge about products then the effect goes away. Put simply, if you only like strawberry jam, it frankly does not matter how many options there are because that is the only one you will choose. The more you know about a product and product category, the less you are affected by the choice effect. It also became a tad difficult to predict what number constitutes too much choice. Is there a magic cut-off: say seven, plus or minus two? Or does it depend on the product?
Now the academics have tried to understand this paradoxical process there are clear arguments in favour and against the overload hypothesis.
There are three arguments in favour of the overload hypothesis. First, having many choices involves more time and effort. Thus choices do become more difficult: it is, as economists note, harder to choose optimally. There is also an increase in regret when there is more choice: perhaps you chose the second best? Third, perhaps large assortments increases hopes of finding the ideal product which are thwarted. So it is more difficult to make and then justify choice as options expand.
But there are arguments against. More choice means more diverse groups of consumers can be satisfied. Consumers are a highly heterogeneous group, as marketers know when they segment markets. Next, there is evidence from retailers that more choice leads to more sales. One study showed that increasing choice within a product range had the effect of increasing the perception of quality. Also, as consumers note, having more choices all in the same place saves effort in making comparisons. People feel better informed and more confident.
Bewilderment or better information? As in so many areas of psychology, the real story is much more complicated, and more interesting, than it first appeared.