CHOICE OVERLOAD - Definitions, Causes, Risks, Advantages & Debiasing
Providing a large number of options may lead to delayed or deferred decisions, poorer choice and dissatisfaction—particularly if all options are highly relevant and a good decision is personally important. This phenomenon is known as choice overload (Oulasvirta et al., 2009). A related phenomenon, and one of the causes of choice overload, is information overload, which means that our performance or decision quality improves as we receive more information, but only up to a certain point, beyond which, our performance starts to decline with further information (Epple & Mengis, 2004).
One of the most influential studies about choice overload was conducted at the entrance of an upscale grocery store, where a tasting table was set up, displaying either a small assortment containing six jams or a large assortment of 24 jams. Every individual who approached the table received a coupon to get $1 off the purchase of any jam of that brand. Although more people approached the tasting table when it displayed 24 jams, only 3% of them redeemed the coupon for a jam. On the other hand, 30% of all people who saw the small assortment of six jams went ahead and actually bought one of the jams with the coupon (Iyengar & Lepper, 2000). So, while more people looked at the larger assortment, they were 10 times more likely to actually make a purchase from the smaller assortment.
Cognitive causes are the psychological mechanisms that explain the bias. It is likely that no one of the multiple explanations can explain every instance of the bias, and each explanation is valid in some cases and invalid in others.
Firstly, the information overload hypothesis suggests that we can only process a limited amount of information in a given time. But if a task requires more information to be processed than our individual capacity, our performance at the task suffers (Epple & Mengis, 2004). Therefore, increasing the number of options makes decisions more complex hence more difficult and frustrating. Information overload also makes thorough comparison of all options seem undesirable from a time-and-effort perspective, which could in turn induce fears of not being able to make the best decision (Scheibehenne et al., 2010). Having a limited time to decide magnifies these effects of overload.
Secondly, choosing from a large number of options also means rejecting a large number of alternatives. Having more discarded alternatives produces more opportunities for regret to emerge, and attractiveness of the chosen option may seem diminished compared to the combined attractiveness of all the non-chosen alternatives. This regret and counterfactual thinking dampen people’s enthusiasm for their choice (D’Angelo & Toma, 2016).
Finally, large assortments also increase our expectations and shift our ideal points in a way that makes them more difficult to attain. Given a large number of options, each with some appealing attributes, may make us desire an option with a combination of all the attributes that appeal to us. Such an option may not even exist in the choice set (Scheibehenne et al., 2010).
Activity in the striatum and anterior cingulate cortex reflects choice set value. This overall value of choice set is distinct from the value we attach to individual items or actions. Striatum plays a key role in risk and reward valuation, while anterior cingulate cortex is involved in detecting conflicting information or situations. So too much conflicting preferences towards different options may be lowering the preference towards the entire set. Activity in these regions resembled an inverted U-shaped function of choice set size i.e. increasing with more choice up to a point and then decreasing. This activation pattern serves as neural indicator of choice overload (Reutskaja et al., 2018).
For the bias to be passed down genetically or culturally to us from our ancestors, it must be beneficial in certain conditions.
A larger choice set means a higher likelihood that we can find the perfect match as per our requirements. It also gives us more confidence that we have selected a high quality option (Chernev et al., 2015). So why didn’t we evolve a preference for large choice sets? Actually we did evolve a preference for more choice, and that is the reason that our satisfaction and decision quality improves with initial expansion of choice set. But size is a relative measure, and what was a large choice set for our early ancestors, is not considered large enough in this age of abundance of choice and information explosion. So we inherited processing capacity and preference for a choice set which was large enough by the standards of our ancestors, but not by today’s standards.
Firstly, faced with choice overload, we tend to defer decisions or are unable to make a choice, as evaluating all the options is too cumbersome a task, and without a thorough evaluation we do not feel confident about our choice (Chernev et al., 2015). This tendency is referred to as decision paralysis, and this is what we experience when we can’t decide what to watch on Netflix as there are just too many equally appealing or unappealing options.
Second, choice overload increases our reliance on heuristic decision-making. Some of the common heuristic strategies that people apply to manage overload include choosing the default or recommended option or choosing the most easily justifiable option (Aljukhadar et al., 2012). In many cases, heuristic decision-making may be the best strategy, but not always, such as in situations where the recommending agent’s interests may not be aligned with ours, an example being a high-stakes sales situation. A recommending agent not perceived as reliable can actually increase decision paralysis and lower decision confidence (Oulasvirta et al., 2009).
Next, faced with choice overload, we often experience dissatisfaction for not being able to thoroughly evaluate all alternatives, and feel regret over discarding some of the appealing alternatives. These negative feelings about our decision can unfold over and last a long time, making us more willing to change our selection, shall the opportunity be available. A study found that online daters who were presented with large as opposed to small pools of potential partners experienced lower satisfaction with their choice, and were more willing to change their partner in the future (D’Angelo & Toma, 2016).
And finally, information anxiety is a condition of stress caused by the inability to access, understand, or make use of, necessary information. A key cause of this is information overload. An example is the anxiety and dissonance caused by glut of news sources with contradicting perspectives. Another example is anxiety caused by overcommunication and overconsumption of content on social media platforms (Bawden and Robinson, 2009).
Firstly, we don’t experience choice overload if we are familiar with the options, or have already established preferences in that category (Scheibehenne et al., 2010).
Second, categorizing options within the choice set can help reduce overload, by reducing the amount of information we need to process, while preserving the variety (Scheibehenne et al., 2010).
Next, choice overload disappears if there’s an obviously dominant option in the choice set. Indeed adding a large number of inferior alternatives to choice a set with a dominant option actually increases our confidence in choosing the dominant option, as we are satisfied that we compared it with a number of alternatives (Bollen et al., 2010).
Next, time pressure and choice accountability i.e. the need to justify our choice to others, amplify effects of choice overload. Easing time and accountability pressures can reduce overload (Chernev et al., 2015).
Next, decision makers can be guided towards the most important information by helping them identify which attributes of the options are likely to contribute most towards their satisfaction or quality of the alternatives (Oulasvirta et al., 2009).
Next, people can initially be presented with a smaller choice and given the option to look at a larger set of options if they so choose (Sethi-Iyengar et al., 2004).
Next, our decision goals and strategies can increase or reduce our likelihood of experiencing choice overload. If we are trying to maximize i.e. looking for the relative best option within a given set, choice overload might occur. On the other hand, if we are satisificing i.e. looking for an option which meets our minimum requirements, we may avoid overload (Scheibehenne et al., 2010). Using other simplifying decision heuristics such as choosing an easily understood or easily justifiable option, may also reduce the occurrence of choice overload (Iyengar & Kamenica, 2006).
And finally, information filtering tools, recommendation agents and default options are shown to improve decision quality, particularly in complex choice situations, as long as these are perceived as reliable by decision makers (Chen et al., 2009).
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