BeHive Consulting ·

March 26, 2021

The Illusion of Freedom of Choice: Why Less is Often More

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In modern Western societies today, living with freedom is something that we highly value and advocate for. We praise democratic governments and condemn authoritarian leaders. We protest for important causes such as abortion rights, gay marriage, and the elimination of racism. We demand more variety in everything we consume, from food to clothes to entertainment. From everyday decisions such as choosing what restaurant to eat at, what phone to buy, and what clothes to wear; to more life-changing decisions such as choosing which career path to take, who to date, and when to start a family, we evaluate between countless of decisions every single day.

These ideas are all construed around the idea that having freedom of choice is something beneficial. With freedom of choice, we should be increasingly satisfied with our lives as we can choose whatever option we think will make us happiest. However, despite the number of choices we have today being ever-increasing, our happiness might not be. Since 1960, the US divorce rate has doubled, teen suicide rate has tripled, the prison population has quintupled, and serious clinical depression has increased tenfold. With an ever-expanding number of options, we are feeling increasingly stressed about all the different decisions we could take, which is consequently making us even unhappier. In other words, perhaps having more options is not as satisfying as we think it is, and our modern democratic society is making us prefer an escape from freedom to avoid feeling the burden of having excessive options.

Shopping for Jam

Findings in behavioural science support this controversial idea that we seek an escape from freedom. In a now-famous study, Iyengar & Lepper (2000) demonstrated this phenomenon through a fascinating experiment. At a busy supermarket, the researchers set up a table selling different jams over consecutive weekends. Customers could sample and buy jams at the tables. The only difference was that on one weekend, they displayed 24 different varieties of jam on the table; on the other, they displayed only 6.

The results from this study were striking. 60% of passers-by stopped at the table with 24 jams, indicating people are attracted to the prospect of having many options to choose from, but only 3% of customers purchased anything. In contrast, only 40% of passers-by stopped at the table with 6 jams, but 30% of these customers went on to purchase something.

What does this study tell us? Clearly, people were attracted to the idea of having many choices, but when it came down to the point of making a decision, in the face of many options most consumers preferred not to make a purchasing decision. This is what is known as the choice overload effect: people feel overwhelmed from having to evaluate many options and prefer not to purchase anything at all.

In addition, Iyengar & Lepper (2000) conducted a similar follow-up study, but this time with Godiva chocolates and students in a lab rather than jams in a supermarket. Students in this study chose to purchase chocolate from a large assortment or a small assortment and could rate their satisfaction with their selected Godiva chocolate if they made a purchasing decision. The researchers found that those who purchased chocolates from a large assortment were typically more unsatisfied with their choice as compared to those who purchased chocolates from a smaller assortment. When choosing from a large number of options, participants felt more regretful that they did not choose an alternative or had higher expectations for their selected chocolate, which consequently led to participants feeling dissatisfied with their selection.

Therefore, not only are consumers less likely to make any purchasing decisions from a large sample, but they are also more likely to be dissatisfied with their purchase if they did make one. These findings should come as no surprise. How many times have you gone to the candy section of a corner store, looked through all the different options of candy, and decided to not buy something? Or how often have you gone to a restaurant and ordered something, only to immediately wish that you had ordered something else?

Big Life Decisions

Of course, these experiments show us how people can feel dissatisfied when buying products like jams and chocolates, but what about bigger life decisions? Further studies conducted by Iyengar and colleagues also found similar results when choosing between options for 401(k) retirement plans and jobs. Having a lot of choices for these big life decisions can have drastic consequences to one’s livelihood and greatly diminish happiness, as people come to regret their own decisions. Apparently, having more options not only makes us more dissatisfied with small decisions like deciding which jam to buy, but also with big life decisions. Intriguingly, an experiment conducted by Steven Levitt (the well-known UChicago Professor and co-creator of the Freakonomics podcast) found that flipping a coin to make certain life decisions such as deciding to quit a job or end a relationship led to participants being substantially happier than those who had to actually make those tough decisions. Rather than having to make these important decisions, simply leaving it to chance may even be more conclusive to our happiness.

More is Less?

In a similar fashion to the jams experiment, we are attracted to the prospect of having freedom, but what ends up happening with too much freedom is that it ultimately causes us to experience choice overload, where we eventually prefer to avoid making decisions or feel dissatisfied with the decisions we do make. Indeed, Barry Schwartz, renowned psychologist and author of the book The Paradox of Choice: Why More Is Less, argues precisely this idea. Endlessly having to make decisions means having to live with the regret and disappointment from what could have been, and this can lead us to become increasingly dissatisfied with our own choices and consequently become increasingly unhappy with our lives.

Business Implications

Consumers clearly demand choice and enjoy the prospect of evaluating different options, but unknowingly to them, they are also more likely to be indecisive and dissatisfied with more options. Through understanding consumer psychology and decision-making strategies, businesses are able to overcome choice overload by altering the decision-making in a way that takes advantage of unconscious psychological biases and guide consumers to make certain choices. This is what behavioural scientists call choice architecture: presenting options in a way which can guide consumers into making more satisfactory decisions. Consumers unconsciously behave in systematically predictable ways, and behavioural scientists can design effective choice architecture to take advantage of our psychological biases and reduce the choice overload effect. For instance, reducing the number of options offered, comparing promoted options to less desirable alternatives, or providing defaults are all effective ways to reduce the choice overload effect and influence consumer decision-making. With good choice architecture, customers will experience less indecision and ultimately be more satisfied with their purchasing decisions, giving businesses a strong incentive to invest considerable time and effort into deciding how to present their options.

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References & Further readings

Chernev, A., Böckenholt, U., & Goodman, J. (2015). Choice overload: A conceptual review and meta-analysis. Journal Of Consumer Psychology, 25(2), 333-358. doi: 10.1016/j.jcps.2014.08.002

Fromm, E. (1941). Escape From Freedom. New York, NY: Farrar & Rinehart

Iyengar, S. S., Wells, R. E., & Schwartz, B. (2006). Doing better but feeling worse: Looking for the “best” job undermines satisfaction. Psychological Science, 17(2), 143-150.

Iyengar, S., & Lepper, M. (2000). When choice is demotivating: Can one desire too much of a good thing?. Journal Of Personality And Social Psychology, 79(6), 995-1006. doi: 10.1037//0022-3514.79.6.995

Levitt, S. D. (2021). Heads or tails: The impact of a coin toss on major life decisions and subsequent happiness. The Review of Economic Studies, 88(1), 378-405.

Myers, D. G. (2000). The American paradox: Spiritual hunger in an age of plenty. New Haven: Yale University Press.

Schwartz, B. (2005). The Paradox of Choice – Why More is Less (p. 4). New York: Harper Perennial.

Sethi-Iyengar, S., Huberman, G., & Jiang, W. (2004). How much choice is too much? Contributions to 401 (k) retirement plans. Pension design and structure: New lessons from behavioral finance, 83, 84-87.