Freedom of choice is generally cherished, whereas a severely limited or artificially restricted choice can lead to discomfort with choosing, and possibly an unsatisfactory outcome. In contrast, a choice with excessively numerous options may lead to confusion, reduced satisfaction, regret of the alternatives not taken, and indifference in an unstructured existence;[2][3]:63 and the illusion that choosing an object or a course, necessarily leads to the control of that object or course, can cause psychological problems.[4]
Types
One can distinguish four or five main types of decisions, although they can be expressed in different ways. Brian Tracy breaks them down into:[5]
command decisions, which can only be made by you, as the "Commander in Chief", or owner of a company
delegated decisions, which may be made by anyone. Decisions for example can be: The color of the bike shed can be delegated, as the decision must be made but the choice is inconsequential.
avoided decisions, where the outcome could be so severe that the choice should not be made, as the consequences can not be recovered from if the wrong choice is made. This will most likely result in negative actions, such as death.
"No-brainer" decisions, where the choice is so obvious that only one choice can reasonably be made.
A fifth type, however, (or fourth if "avoided" and "no-brainer" decisions are combined as one type), is the collaborative decision, made in consultation with, and by agreement of others. Collaborative Decision Making revolutionized air-traffic safety by not deferring to the captain when a lesser crew-member becomes aware of a problem.[6]
Another way of looking at decisions focuses on the thought mechanism used - whether the decision is:[7]
Rational
Intuitive
Recognition-based
Combination
Recognizing that "type" is an imprecise term, an alternate way to classify types of choices is to look at outcomes and the impacted entity. For example, using this approach three types of choices might be:[8]
business
personal
consumer
Or politicians may choose to support or oppose options based on local, national, or international effects.
As a moral principle, decisions should be made by those most affected by the decision, but this is not normally applied to persons in jail, who might likely make a decision other than to remain in jail.[9]Robert Gates cited this principle in allowing photographs of returning war-dead.[10]
One can distinguish between conscious and unconscious choice.[11] Processes such as brainwashing or other influencing strategies may have the effect of having unconscious choice masquerade as (praiseworthy) conscious choice.[12]
Choices may lead to irreversible or to reversible outcomes; making irreversible choices (existential choices) may reduce choice overload.[13]
Evaluability in economics
When choosing between options one must make judgments about the quality of each option's attributes. For example, if one is choosing between candidates for a job, the quality of relevant attributes such as previous work experience, college or high school GPA, and letters of recommendation will be judged for each option and the decision will likely be based on these attribute judgments. However, each attribute has a different level of evaluability, that is, the extent to which one can use information from that attribute to make a judgment.
An example of a highly evaluable attribute is the SAT score. It is widely known in the United States that an SAT score below 800 is very bad while an SAT score above 1500 is exceptionally good. Because the distribution of scores on this attribute is relatively well known it is a highly evaluable attribute. Compare the SAT score to a poorly evaluable attribute, such as the number of hours spent doing homework. Most employers would not know what 10,000 hours spent doing homework means because they have no idea of the distribution of scores of potential workers in the population on this attribute.
As a result, evaluability can cause preference reversals between joint and separate evaluations. For example, a 1999 review and theoretical analysis[14] looked at how people choose between options when they are directly compared because they are presented at the same time or when they cannot be compared because one is only given a single option. The canonical example is a hiring decision made about two candidates being hired for a programming job. Subjects in an experiment were asked to give a starting salary to two candidates, Candidate J and Candidate S. However, some viewed both candidates at the same time (joint evaluation), whereas others only viewed one candidate (separate evaluation). Candidate J had experience of 70 KY programs, and a GPA of 2.5, whereas Candidate S had experience of 10 KY programs and a GPA of 3.9. The results showed that in joint evaluation both candidates received roughly the same starting salary from subjects, who apparently thought a low GPA but high experience was approximately equal to a high GPA but low experience. However, in the separate evaluation, subjects paid Candidate S, the one with the high GPA, substantially more money. The explanation for this is that KY programs is an attribute that is difficult to evaluate and thus people cannot base their judgment on this attribute in separate evaluation.
Number of options and paradox
Several research studies in economic psychology have concentrated on examining the variations in individual behavior when confronted with a low versus high choice set size, which refers to the number of available options. A particular area of interest lies in determining whether individuals demonstrate a higher propensity to purchase a product from a larger choice set compared to a smaller one.Currently, the effect of choice set size on the probability of a purchase is unclear. In some cases, large choice set sizes discourage individuals from making a choice[15] and in other cases it either encourages them or has no effect.[16] One study compared the allure of more choice to the tyranny of too much choice. Individuals went virtual shopping in different stores that had a randomly determined set of choices ranging from 4 to 16, with some being good choices and some being bad. Researchers found a stronger effect for the allure of more choice. However, they speculate that due to random assignment of number of choices and goodness of those choices, many of the shops with fewer choices included zero or only one option that was reasonably good, which may have made it easier to make an acceptable choice when more options were available.[17]
There is some evidence that while greater choice has the potential to improve a person's welfare, sometimes there is such a thing as too much choice. For example, in one experiment involving a choice of free soda, individuals explicitly requested to choose from six as opposed to 24 sodas, where the only benefit from the smaller choice set would be to reduce the cognitive burden of the choice.[16] A recent study supports this research, finding that human services workers indicated preferences for scenarios with limited options over extensive-options scenarios. As the number of choices within the extensive-options scenarios increased, the preference for limited options increased as well.[18] Attempts to explain why choice can demotivate someone from a purchase have focuses on two factors. One assumes that perusing a larger number of choices imposes a cognitive burden on the individual.[19] The other assumes that individuals can experience regret if they make a suboptimal choice, and sometimes avoid making a choice to avoid experiencing regret.[20]
Further research has expanded on choice overload, suggesting that there is a paradox of choice. As increasing options are available, three problems emerge. First, there is the issue of gaining adequate information about the choices in order to make a decision. Second, having more choices leads to an escalation of expectation. When there are increased options, people's standards for what is an acceptable outcome rise; in other words, choice "spoils you." Third, with many options available, people may come to believe they are to blame for an unacceptable result because with so many choices, they should have been able to pick the best one. If there is one choice available, and it ends up being disappointing, the world can be held accountable. When there are many options and the choice that one makes is disappointing, the individual is responsible.[21]
However, a recent meta-analysis of the literature on choice overload calls such studies into question.[22] In many cases, researchers have found no effect of choice set size on people's beliefs, feelings, and behavior. Indeed, overall, the effect of "too many options" is minimal at best.
While it might be expected that it is preferable to keep one's options open, research has shown that having the opportunity to revise one's decisions leaves people less satisfied with the decision outcome.[23] A recent study found that participants experienced higher regret after having made a reversible decision. The results suggest that reversible decisions cause people to continue to think about the still relevant choice options, which might increase dissatisfaction with the decision and regret.[24]
Individual personality plays a significant role in how individuals deal with large choice set sizes. Psychologists have developed a personality test that determines where an individual lies on the satisfier spectrum. A maximizer is one who always seeks the very best option from a choice set, and may anguish after the choice is made as to whether it was indeed the best. Satisfiers may set high standards but are content with a good choice, and place less priority on making the best choice. Due to this different approach to decision-making, maximizers are more likely to avoid making a choice when the choice set size is large, probably to avoid the anguish associated with not knowing whether their choice was optimal.[16] One study looked at whether the differences in choice satisfaction between the two are partially due to a difference in willingness to commit to one's choices. It found that maximizers reported a stronger preference for retaining the ability to revise choices. Additionally, after making a choice to buy a poster, satisfiers offered higher ratings of their chosen poster and lower ratings of the rejected alternatives. Maximizers, however, were less likely to change their impressions of the posters after making their choice which left them less satisfied with their decision.[25]
Maximizers are less happy in life, perhaps due to their obsession with making optimal choices in a society where people are frequently confronted with choice.[26] One study found that maximizers reported significantly less life satisfaction, happiness, optimism, and self-esteem, and significantly more regret and depression, than did satisfiers. In regards to buying products, maximizers were less satisfied with consumer decisions and were more regretful. They were also more likely to engage in social comparison, where they analyze their relative social standing among their peers, and to be more affected by social comparisons in which others appeared to be in higher standing than them. For example, maximizers who saw their peer solve puzzles faster than themselves expressed greater doubt about their own abilities and showed a larger increase in negative mood.[27] On the other hand, people who refrain from taking better choices through drugs or other forms of escapism tend to be much happier in life.
Others[who?] say that there is never too much choice and that there is a difference between happiness and satisfaction: a person who tries to find better decisions will often be dissatisfied, but not necessarily unhappy since his attempts at finding better choices did improve his lifestyle (even if it wasn't the best decision he will continually try to incrementally improve the decisions he takes).
Choice architecture is the process of encouraging people to make good choices through grouping and ordering the decisions in a way that maximizes successful choices and minimizes the number of people who become so overwhelmed by complexity that they abandon the attempt to choose. Generally, success is improved by presenting the smaller or simpler choices first, and by choosing and promoting sensible default options.[28]
Relationship to identity
Choosing a hairstyle.
Certain choices, as personal preferences, can be central to expressing one's concept of self-identity or values. In general, the more utilitarian an item, the less the choice says about a person's self-concept. Purely functional items, such as a fire extinguisher, may be chosen solely for function alone, but non-functional items, such as music, clothing fashions, or home decorations, may instead be chosen to express a person's concept of self-identity or associated values.[29]
A 2014 review of previous studies on choice investigated how synchronic (changing) and diachronic (persisting) identity can influence choices and decisions that an individual makes and especially in consumer choices. The synchronic dimension of identity is more about the various parts of an identity and how these shifting aspects can change behavior. The diachronic dimension of identity is how a person’s identity persists and is the same and how they understand an object in relation to their identity. They found that stereotypes in concepts like gender norms play a big role in decision-making and that this might stem from significant historical beliefs in gender roles and identity.[30]
A study was conducted that looked into how attitude towards a particular brand would influence choice of a brand as it is being advertised. A picture of running shoes was created to either make the ad look good or bad and participants were asked to choose between four different brands. The attitude toward the add (Aad) shows to have a significant impact on choice of brand as well as the act of buying the brand (AB). This suggests that the attitude one had towards a brand can influence the choice and the intention to buy a particular item.[37]
The rational choice model, also called rational choice theory refers to a set of guidelines that help understand economic and social behaviour. The theory originated in the eighteenth century and can be traced back to the political economist and philosopher Adam Smith. The theory postulates that an individual will perform a cost–benefit analysis to determine whether an option is right for them. Rational choice theory looks at three concepts: rational actors, self interest and the invisible hand.
Satisficing is a decision-making strategy or cognitive heuristic that entails searching through the available alternatives until an acceptability threshold is met. The term satisficing, a portmanteau of satisfy and suffice, was introduced by Herbert A. Simon in 1956, although the concept was first posited in his 1947 book Administrative Behavior. Simon used satisficing to explain the behavior of decision makers under circumstances in which an optimal solution cannot be determined. He maintained that many natural problems are characterized by computational intractability or a lack of information, both of which preclude the use of mathematical optimization procedures. He observed in his Nobel Prize in Economics speech that "decision makers can satisfice either by finding optimum solutions for a simplified world, or by finding satisfactory solutions for a more realistic world. Neither approach, in general, dominates the other, and both have continued to co-exist in the world of management science".
The theory of consumer choice is the branch of microeconomics that relates preferences to consumption expenditures and to consumer demand curves. It analyzes how consumers maximize the desirability of their consumption, by maximizing utility subject to a consumer budget constraint. Factors influencing consumers' evaluation of the utility of goods include: income level, cultural factors, product information and physio-psychological factors.
In psychology, decision-making is regarded as the cognitive process resulting in the selection of a belief or a course of action among several possible alternative options. It could be either rational or irrational. The decision-making process is a reasoning process based on assumptions of values, preferences and beliefs of the decision-maker. Every decision-making process produces a final choice, which may or may not prompt action.
A status quo bias or default bias is a cognitive bias which results from a preference for the maintenance of one's existing state of affairs. The current baseline is taken as a reference point, and any change from that baseline is perceived as a loss or gain. Corresponding to different alternatives, this current baseline or default option is perceived and evaluated by individuals as a positive.
George Loewenstein is an American educator and economist. He is the Herbert A. Simon Professor of Economics and Psychology in the Social and Decision Sciences Department at Carnegie Mellon University and director of the Center for Behavioral Decision Research. He is a leader in the fields of behavioral economics, neuroeconomics, Judgment and Decision Making.
Choice-supportive bias or post-purchase rationalization is the tendency to retroactively ascribe positive attributes to an option one has selected and/or to demote the forgone options. It is part of cognitive science, and is a distinct cognitive bias that occurs once a decision is made. For example, if a person chooses option A instead of option B, they are likely to ignore or downplay the faults of option A while amplifying or ascribing new negative faults to option B. Conversely, they are also likely to notice and amplify the advantages of option A and not notice or de-emphasize those of option B.
Career assessments are tools that are designed to help individuals understand how a variety of personal attributes, impact their potential success and satisfaction with different career options and work environments. Career assessments have played a critical role in career development and the economy in the 20th century. Individuals or organizations often use assessment of some or all of these attributes, such as university career service centers, career counselors, outplacement companies, corporate human resources staff, executive coaches, vocational rehabilitation counselors, and guidance counselors to help individuals make more informed career decisions.
Distinction bias, a concept of decision theory, is the tendency to view two options as more distinctive when evaluating them simultaneously than when evaluating them separately.
The Paradox of Choice – Why More Is Less is a book written by American psychologist Barry Schwartz and first published in 2004 by Harper Perennial. In the book, Schwartz argues that eliminating consumer choices can greatly reduce anxiety for shoppers. The book analyses the behavior of different types of people. This book argues that the dramatic explosion in choice—from the mundane to the profound challenges of balancing career, family, and individual needs—has paradoxically become a problem instead of a solution and how our obsession with choice encourages us to seek that which makes us feel worse.
Overchoice or choice overload is the paradoxical phenomenon that choosing between a large variety of options can be detrimental to decision making processes. The term was first introduced by Alvin Toffler in his 1970 book, Future Shock.
Choice architecture is the design of different ways in which choices can be presented to decision makers, and the impact of that presentation on decision-making. For example, each of the following:
Itamar Simonson is a professor of marketing, holding the Sebastian S. Kresge Chair of Marketing in the Graduate School of Business, Stanford University. He is known for his work on the factors that determine the choices that buyers make. His academic career started at the University of California at Berkeley, where he taught for six years, before he moved to Stanford. Many of his former PhD students hold senior positions at some of the best universities in the world.
Sheena S. Iyengar is the S.T. Lee Professor of Business in the Management Department at Columbia Business School, widely and best known as an expert on choice. Her research focuses on the many facets of decision making, including: why people want choice, what affects how and what we choose, and how we can improve our decision making. She has presented TED talks on choice and is the author of The Art of Choosing (2010).
Unconscious thought theory (UTT) posits that the unconscious mind is capable of performing tasks outside of one's awareness, and that unconscious thought (UT) is better at solving complex tasks, where many variables are considered, than conscious thought (CT), but is outperformed by conscious thought in tasks with fewer variables. It was proposed by Ap Dijksterhuis and Loran Nordgren in 2006.
In decision making and psychology, decision fatigue refers to the deteriorating quality of decisions made by an individual after a long session of decision making. It is now understood as one of the causes of irrational trade-offs in decision making. Decision fatigue may also lead to consumers making poor choices with their purchases.
The memory system plays a key role in the decision-making process because individuals constantly choose among alternative options. Due to the volume of decisions made, much of the decision-making process is unconscious and automatic. Information about how a decision is made is remembered and used for future decisions. Memory is susceptible to biases, but it is integral to the formation of preferences and to differentiation between choices.
Maximization is a style of decision-making characterized by seeking the best option through an exhaustive search through alternatives. It is contrasted with satisficing, in which individuals evaluate options until they find one that is "good enough".
Behavioral game theory seeks to examine how people's strategic decision-making behavior is shaped by social preferences, social utility and other psychological factors. Behavioral game theory analyzes interactive strategic decisions and behavior using the methods of game theory, experimental economics, and experimental psychology. Experiments include testing deviations from typical simplifications of economic theory such as the independence axiom and neglect of altruism, fairness, and framing effects. As a research program, the subject is a development of the last three decades.
Consideration set is a model used in consumer behaviour to represent all of the brands and products a consumer evaluates before making a final purchase decision. The term consideration set was first used in 1977 by Peter Wright and Fredrick Barbour. The consideration set is a subset of the awareness set, which is all of the brands and products a consumer initially thinks of when faced with a purchasing decision. The awareness set is filtered into the consideration set through the consumer's individual thoughts, preferences, and feelings — such as price, mood, previous experiences, and heuristics. Conversely, products that do not meet the criteria for the consideration set are either placed into the inert set or the inept set. These sets are fluid and the products in each set can change rapidly when the consumer is presented with new information.
↑ Cole-Whittaker, Terry (1989). Love and Power in a World Without Limits: A Woman's Guide to the Goddess Within. Harper & Row. p.37. ISBN9780062501530. Retrieved 4 October 2019. Changing a reality can be a conscious choice, selected at will by the person, or it can be an unconscious choice based on an intended desire. It can also be an unconscious act of programming by something as simple as a friend telling you about something or a television commercial brainwashing you to buy a particular product.
↑ Bernstein, Richard J. (16 March 2009). "Existential Choice: Heller's Either/Or". In Terezakis, Katie (ed.). Engaging Agnes Heller: A Critical Companion. Lanham, Maryland: Lexington Books (published 2009). p.89. ISBN9781461633341. Retrieved 3 November 2021. Existential choice is by definition irreversible and irrevocable. You cannot choose your destiny in a reversible way, for a reversible choice is not a choice of destiny, by definition not an existential choice.
↑ Hsee, C.K., Loewenstein, G.F., Blount, S., Bazerman, M.H. (1999). Preference reversals between joint and separate evaluations of option: A review and theoretical analysis. Psychological Bulletin 125(5), 576–590.
↑ White, C. M., & Hoffrage, U. (2009). Testing the tyranny of too much choice against the allure of more choice. Psychology & Marketing, 26(3), 280-98.
↑ Reed, D. D., DiGennaro Reed, F. D., Chok, J., & Brozyna, G. A. (2011). The 'tyranny of choice': Choice overload as a possible instance of effort discounting. The Psychological Record, 61(4), 547-60.
↑ Gilbert, Daniel T., Ebert, Jane E. J. (2002). Decisions and revisions: The affective forecasting of changeable outcomes. Journal of Personality and Social Psychology. 82(4). 503-14.
↑ Bullens, L., van Harreveld, F., & Förster, J. (2011). Keeping one's options open: The detrimental consequences of decision reversibility. Journal of Experimental Social Psychology, 47(4), 800-05.
↑ Sparks, E. A., Ehrlinger, J., & Eibach, R. P. (2012). Failing to commit: Maximizers avoid commitment in a way that contributes to reduced satisfaction. Personality And Individual Differences, 52(1), 72-77.
↑ Schwartz, B., Ward, A., Monterosso, J., Lyubomirsky, S., White, K., & Lehman, D. R. (2002). Maximizing versus satisficing: Happiness is a matter of choice. Journal of Personality and Social Psychology, 83(5) 1178-97.
↑ For example: Krishnamurti, Jiddu. "London, 4th Public Talk, June 12, 1962". Collected Works. Vol.13. p.188. You can't be totally aware if you are choosing. [...] you can't be aware totally if you are condemning, if you are justifying, or if you say, 'I will keep my beliefs, my experiences, my knowledge.' Then you are only partially aware, and partial awareness is really blindness. Quoted in: Krishnamurti, Jiddu (1992). "The Nature of Choiceless Awareness". In Patterson, Albion W. (ed.). Choiceless Awareness: A Selection of Passages for the Study of the Teachings of J. Krishnamurti (Reviseded.). Ojai, California: Krishnamurti Foundation of America (published 2000). pp.16–17. ISBN9781888004045. Retrieved 13 August 2020.
↑ Rosenfeld, Sophie (2014-06-03). "Free to Choose?: How Americans have become tyrannized by the culture's overinvestment in choice". The Nation (June 23–30, 2014ed.). New York: The Nation Company, L.P. ISSN0027-8378. Retrieved 2014-06-12. What if the real problem is the imperative of making all those choices in all those different realms, from sex to software, in the first place? This is the view of a small number of philosophers, legal theorists and culturally aware psychologists, including Barry Schwartz and, more recently, Sheena Iyengar, Sigal Ben-Porath, Kent Greenfield and Renata Salecl. They insist that we have become overwhelmed and even 'tyrannized' by our culture's overinvestment in choice.
Hsee, C.K., Loewenstein, G.F., Blount, S., Bazerman, M.H. (1999). Preference reversals between joint and separate evaluations of option: A review and theoretical analysis. Psychological Bulletin125(5), 576–590.
Irons, B. and C. Hepburn. 2007. "Regret Theory and the Tyranny of Choice." The Economic Record. 83(261): 191–203.
Iyengar, S.S. and M.R. Lepper. 2000. "When Choice is Demotivating: Can One Desire Too Much of a Good Thing?" Journal of Personality and Social Psychology. 70(6): 996–1006.
Kahneman, Daniel; Tversky, Amos, eds. (1999). Choices, Values, and Frames. Cambridge University Press. ISBN978-0-521-62749-8.
Norwood, F. 2006. "Less Choice is Better, Sometimes." Journal of Agricultural and Food Industrial Organization. 4(1). Article 3.
Norwood, F. Bailey, Jayson L. Lusk, Bharath Arunachalam, and Shida Rastegari Henneberry. "An Empirical Investigation Into the Excessive-Choice Effect." American Journal of Agricultural Economics. Forthcoming.
Rosenthal, Edward C. (2006). The Era of Choice: The Ability to Choose and Its Transformation of Contemporary Life. MIT Press. ISBN0-262-68165-X.
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