Can More Be Less?
At Starbucks, no one orders just a regular coffee, at the Gap, we look at easy fit or relaxed or straight leg, and when selecting health insurance, we think about deductibles and prescription drug coverage. Everywhere we have many choices.
One experiment in a California supermarket focused on the impact of choice. Faced with six kinds of jam, 30% of the tasters bought a jar and walked out satisfied. By contrast, with 24 to sample, 3% made a purchase while 97% left with nothing. Why? The researcher concluded that there was too much choice.
In a TED talk, psychologist Barry Schwartz suggests that too much choice leads to paralysis, dissatisfaction, and self-blame. His solution is income redistribution through which unhappy affluent consumers with too many choices transfer income to poorer groups with fewer alternatives. Disagreeing, libertarian writer Virginia Postrel says that satisfaction requires the choices that a market economy creates.
The Economic Life
Why should we care about choice research? Starting with health care reform, legislation can present the potential for many alternatives or few.