Motivation and emotion/Book/2022/Choice overload

Choice overload:
What is choice overload? What is the optimal amount of choice?

Overview

Why did you choose to read this motivation and emotion book chapter out of the thousands of other chapters? Did you feel overwhelmed with the number of options to read? How many readings would you have preferred to choose from? A choice is the range of different things from which a being can choose, such as reading choice, choosing an item in the supermarket, or deciding what movie to match.

Making a choice may seem simple, however in order to make a choice, people need to have the relevant knowledge and information to evaluate all possible selections (Johns et al., 2013). There have been competing theories and arguments about whether there can be such a thing as too much choice, also known as choice overload.

Choice overload is also known as choice paradox and over choice. This phenomenon refers to the complex decision-making problems that are caused by the excessive availability of alternatives (Park & Kang, 2022). Therefore, choice overload is directly related to the relationship between the number of alternative choices and an individual’s choice behaviour (Park & Jang, 2013). Why are multiple alternative choices a bad thing? Once people perceive that the amount of choices is too high for one’s ability to process them, they are at a higher risk of being overwhelmed (Park & Kang, 2022).

Choice overload and the negative emotions associated with being overwhelmed by the amount of choice is a problem as every day, every hour and arguably every minute we make choices, including the decision to not choose any option. It is important to understand how we comprehend and handle choices in order to adapt, where possible, the number of choices to relieve pressure or stress involved with making decisions. Psychological science can help by analysing and investigating the cognitive appraisals and emotions when one is faced with choices through the use of theories such as economic rational choice theory, the Goldilocks effect, and analysis paralysis.

Focus questions:

Is more choice better?
What is the optimal amount of choice?
How does one's knowledge influence choice perception?

Economic rational choice theory

Figure 1. According to economic rational choice theory, an increase in the number of options to choose from should increase satisfaction.

Economic rational choice theory hypothesises that increased choice should increase satisfaction with the chosen option as it increases the likelihood that people can satisfy their personal preferences (Hafner et al., 2018). There is a dominant focus on increasing choices in society across a range of life domains including healthcare, education, entertainment, and consumerism (Lyengar, 2010). It is suggested that a greater number of choices means there is a higher likelihood of achieving customers' purchasing goals (Hafner et al., 2018). Similarly, more choices provides a greater sense of personal responsibility with the choices (Zuckerman et al., 1978). These beliefs are demonstrated in a study on partner selection in online dating, which found that those who received of a selection of six options instead of 24 were less satisfied with their choice (D'Angelo & Toma, 2017).

Mass customisation

Mass customisation is a new frontier in business in which technology is used to increase the variety and customisation of products or services without increasing total costs. This is an appealing and strategic advantage for marketing to consumer-driven societies and provides a positive economic value (Park & Kang, 2022). An example of mass customisation is the effort of fast food restaurants to tailor their offerings for each consumer such as by providing vegetarian, vegan, and halal options (Park & Kang, 2022). Businesses that have asserted their ability for customisation have also been found to have a positive influence on service quality, customer satisfaction, trust, and ultimately customer loyalty to service providers as customers are able to enjoy a product or service that seemingly only exists for them (Coelho & Henseler, 2012).

Mass customisation allows businesses to offer more services and products to a higher consumer base however a trade-off of choice and experience has been found. With more options and services to select from, consumers are required to make several choices in limited time, which increases pressure and the chances of experiencing choice overload (Park & Kang, 2022). This indicates there may be such a thing as "too much" choice.

Customer satisfaction

A positive relationship between customisation and customer satisfaction has been established by multiple studies investigating the phenomenon of choice (Kanama, 2017). Park and Kang (2022) state that mass customisation includes a key form of customer involvement, which is the simple concept of making a choice, which we will later find is far more complex. The "more is better" perception of choice supported by economic rational choice theory has been transferred into the analysis of consumer behaviour. Economists insist that more choices increase people’s willingness to make a choice that eventually maximises utility, which was demonstrated by D'Angelo and Toma (2017) with the analysis of online dating satisfaction (Benartzi & Thaler, 2001). Further studies have found that the number of choices explains a greater likelihood of achieving a customer's purchase goals, enhances customer enjoyment, and the hedonic value of purchasing through learning about and comparing product trends (Babin et al., 1994; Chernev et al., 2015; ).

Figure 2. Inverted U Graph displaying the curvilinear function of optimal amount of choice

Is the economic rational choice theory valid?

There has been contradictory research in regards to whether more choice is more satisfactory for consumers. A study on purchasing behaviour for gourmet jams and chocolates found that consumers were more likely to purchase the product from a limited rather than extensive array of choices and furthermore reported greater satisfaction and reduced regret with their selections (Park & Kang, 2022).

Similarly, findings have shown when presenting options of pens for participants to purchase, the likelihood of choosing to buy a pen increased as the number of choices rose to 10 options, but when the choice of pens increased further than 10 options, the likelihood of purchasing decreased steadily (Shah & Wolford, 2007). This suggests that, firstly, the economic rational choice theory is flawed and, secondly, there is a curvilinear function for an optimal number of options.

The Goldilocks effect

The Goldilocks effect is named after the popular children's story, Goldilocks and the Three Bears in which Goldilocks preferred her porridge not too hot, nor too cold, but "just right". Similarly, it is suggested people's preferences are somewhere in the middle and that they are more satisfied with choices from a mid-sized choice set as it is more psychologically manageable in comparison to a large choice set (Hafner et al., 2018).

Figure 2. Goldilocks preferred the not too hot, not too cold, "just right" porridge

Research on the placebo effect for participants reporting nonspecific complaints such as a headache received a choice of either 2, 12, or 28 choices of Bach's 38 Flower Essences as an option to use for a 2-week period. Participants who were presented with 12 options were more satisfied with their choice and reported significantly lower symptoms after the two weeks, indicating an optimal choice set (Hafner et al., 2018).

Why would the Goldilocks effect occur? One possibility is that when presented with too large of a choice set generates too many counterfactuals and more alternative possibilities to be imagined thus decreasing satisfaction (Epstude & Roese, 2008).

Case study: Day in the life of a student

A University of Canberra student Zoe works full-time and studies full-time. Zoe wakes up at 7am and chooses one of two breakfasts, toast, or cereal. Zoe is not satisfied as she did not feel like either of the breakfasts and would have preferred another option such as pancakes.

At work and university, Zoe does not have any issues deciding what to do as she normally has set tasks at work and tutorial/lectures for each day. For dinner, Zoe decides to treat herself to takeaway McDonalds, she enjoys her dinner as she got to select from 10 to 15 burger types and believes she got to select the best option and had a right amount of choice.

Lastly, after Zoe finishes her university tasks for the day and turns on Netflix to browse something to watch before bed. She scrolls for 15 minutes and is overwhelmed with the amount of choice and not satisfied with any option. She is about to give up and just go to sleep, but she goes to her "continue watching" section and quickly decided to watch one out of the 7 shows she has started to watch.

Subjective knowledge

The provision of choices influences the decision makers’ motivation, satisfaction, and willingness to act, however, influences on how one interprets and perceives a choice set has not been investigated (Hadar & Sood, 2014). One major influence on how a person interprets and perceives a choice set, is the person's subjective knowledge. Subjective knowledge is the decision maker's beliefs about their state of knowledge (Hadar & Sood, 2014).

People who feel unknowledgeable, or low subjective-knowledge people, are willing to purchase when more choices are available, consistent with the economic rational choice theory, whereas individuals who do feel knowledgeable, or high-knowledge people, experience choice overload when too many choices are available, consistent with the Goldilocks effect theory (Hadar & Sood, 2014). It is suggested that more options should be provided in domains in which people often feel ignorant whereas fewer options should be offered in domains in which people tend to feel knowledgeable (Hadar & Sood, 2014).

Subjective knowledge also influences purchasing behaviours in which individuals with higher subjective knowledge about a product express less interest in searching for product-related information due to the belief that new information will be redundant with their current knowledge, however individuals with lower subjective knowledge seek out product information more extensively and view new product information as more important (Urbany et al., 1989; Wood & Lynch, 2002). Similarly, subjective knowledge correlates positively with decision confidence and with willingness to act, for example decision makers were more likely to invest in options they felt more knowledgeable about, even when they had less actual knowledge about these options, because they felt more confident that these were better investments (Hadar et al., 2013).

Choice presentation

Figure 3. Individuals prefer visual presentation in comparison to verbal.

Does the presentation of a choice set prevent choice overload? A wide variety of choices can make the process more difficult and complex thus the presentation of the choice can also increase or decrease the complexity of the choice (Townsend & Kahn, 2014). The likelihood that consumers will purchase from a retail site is positively related to the perceived variety that they think the assortment offers, rather than the actual variety (Broniarczyk et al.,1998). Additionally, when actual variety in choice sets was large and overwhelming, perceived variety and hence consumer satisfaction could be controlled through both the way information about the options was presented and consumer input in the product examination process (Huffman & Kahn, 1998). Consumers also have a preference for visual depiction of the stimuli rather than verbal depiction, regardless of choice set size (Townsend & Kahn, 2014). This preference remains even when the visual stimuli is not naturally representative of the product and when verbal depiction allows for greater differentiation.

Is the size of the choice set the key indicator of choice overload or is it the way the choices are presented? When choice sets are small, visual presentation results in more efficient processing of stimuli, increased perceived variety, and faster processing times (Townsend & Kahn, 2014). However, when choice sets are large, visual presentation motivates a simplistic approach and when preferences are unknown consumers may do better with verbal depiction that induces a slower, more systematic processing style (Townsend & Kahn, 2014).

Analysis paralysis

Much of this chapter discusses choice overload and the psychological theory behind the concept, however the consequences of experiencing choice overload are yet to be explored. Earlier choice overload was established with negative emotions and becoming overwhelmed however a major consequence of choice overload is analysis paralysis. Analysis paralysis is the effect of experiencing intense choice overload so that the individual is essentially too paralysed to make a choice (Álvarez et al., 2014). Roberts (2010) describes three forms of analysis paralysis which all subsequently influence one another: analysis process paralysis, risk uncertainty paralysis, and decision precision paralysis.

Analysis process paralysis is when the person enjoys the process of analysis so much that they become paralysed into making a decision due to a fascination with the analytical techniques over the decision itself (Roberts, 2010).

Case study

Lyn spends time researching the best way to set up a social media platform for her work rather than setting up her social media accounts and starting to fix her presented problem.

Risk uncertainty paralysis is when the individual attempts to avoid risk involved with the decision and is paralysed by the fact that risk of the decision cannot be eliminated entirely (Roberts, 2010).

Case study

Holly is too scared to leave her current job and start a new sales job she is passionate about in case she fails and looses her steady income.

Decision precision paralysis is when the individual is paralysed by making a decision because they become fixated on all the options and trying to become knowledgeable by exploring all questions, possibilities, and additional options (Roberts, 2010).

Case study

Olivia works at a IT company and she is responsible for searching for a new software system however she has become fixated on researching multiple softwares in great depth.

Conclusion

Choice overload is the phenomenon in which excessive availability of alternative choices creates a complex decision-making process, with some individuals feeling overwhelmed, experiencing negative emotions, and making the incorrect or no decision at all (Álvarez et al., 2014; Park & Kang, 2013, 2022; ). The optimal amount of choice depends on the complexity of the decision, the subjective knowledge of the individual making the decision, and how the choice is presented (Hadar & Sood, 2014; Townsend & Kahn, 2014).

The economic rational choice theory emphasises that more choice is better and increased choice increases satisfaction with the chosen option as it increases the likelihood that people can satisfy their personal preferences, whereas the Goldilocks effect theory states that people's preferences are somewhere in the middle and that people are more satisfied with choices drawn from a mid-size choice set as it is more psychologically manageable in comparison to a large choice set (Hafner et al., 2018). As choice is a part of every aspect of one's life both theories have been validated by researchers and focus has been shifted to how cognition influences preferences for the amount of choice we are presented with.

Two factors that influence the cognitive appraisal of a choice dilemma are subjective knowledge and choice presentation. Subjective knowledge is the decision makers' beliefs about their state of knowledge. Individuals who have low subjective-knowledge prefer more choice options, consistent with the economic rational choice theory, whereas people who have high-subjective knowledge experience choice overload when too many choices are available, consistent with the Goldilocks effect theory (Hadar & Sood, 2014).

Choice presentation also influences the effects of choice overload. Research supports that perceived variety is more important than actual variety. Similarly, visual presentation of choices is preferred over verbal presentation (Townsend & Kahn, 2014).

As making decisions and choice is a prominent aspect of life, it is not reasonable to provide a set number for an optimal amount of choice due to the variety of contexts and individual differences which can influence this preference of amount of choice provided. Instead, it is important to recognise the key factors which influence choice preferences and take into consideration the context and one’s individual characteristics in order to prevent choice overload and its negative effects.

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External links

Facing Facts (Beaumont, 2017)
The Paradox of Choice (Schwartz, 2007)
Consumerism -- Too many choices? (American Psychological Association, 2004)
How to Beat ‘Analysis Paralysis’ and Make All the Decisions (Healthline, 2022)