Overchoice

too many choices by carl richards

jam experiment

Overchoice, also referred to as ‘choice overload,’ is a term describing a problem facing consumers in the postindustrial society: too many choices. The term was first introduced by futurist Alvin Toffler in his 1970 book, ‘Future Shock.’ Overchoice is the result of technological progress. Since the beginning of the Industrial Revolution, each year, more and more products are being offered. Consumers have more disposable income to spend, and producers can more easily and cheaply introduce product variations.

Having more choices, on the surface, appears to be a positive development; however it hides an underlying problem: faced with too many choices, consumers have trouble making optimal choices, and thus as a result can be indecisive. When confronted with a plethora of choices without perfect information, many people prefer to make no choice at all, even if making a choice would lead to a better outcome. Toffler noted that as the choice turns to overchoice, ‘freedom of more choices’ ironically becomes the opposite—the ‘unfreedom.’

Existence of overchoice, both perceived and real, was confirmed by studies as early as the mid-1970s. Numbers of various brands, from soaps to cars, have been steadily rising for over half a century. In just one example—different brands of soap and detergents—the numbers of choices offered by an average US supermarket went from 65 in 1950, through 200 in 1963, to over 360 in 2004. The more choices one has, the slower one is to make decisions. Often, a customer makes a decision without sufficiently researching his choices, which can require days. Opposites of overchoice (sometimes referred to as underchoice) include standardization. Although originally conceived as a tendency of consumers within an economy, overchoice has also been shown to affect decision making outside of consumer environments. Having extensive choices in a classroom setting has been shown to decrease students’ motivation and willingness to make decisions. Student performance also declines as available choices significantly increase.

Choice overload is not a problem in all cases, there are some preconditions that must be met before the effect can take place. First, people making the choice must not have a clear prior preference for an item type or category. If the choice-maker has a preference, the increase in option assortment will be preferred; increasing satisfaction, and probability of a choice being made. Second, there must not be a clearly dominant option in the choice domain, meaning that all items must appear to be of the same perceived quality. The existence of a dominant option and many non-dominant options will also lead to higher frequency of a choice being made and higher satisfaction with the decision. Third, there is a negative relationship between choice assortment (quantity) and satisfaction only in people less familiar with the choice domain. This means that if the person making a choice has expertise in the subject matter, they can more easily sort through the options and not be overwhelmed by the variety.

Choice overload is reversed when people choose for another person. Economist Evan Polman has found that overload is context dependent: choosing from many alternatives by itself is not demotivating. He found that it is not always a case of whether choices differ for the self and others in risk, but rather ‘…according to a selective focus on positive and negative information.’ Evidence shows there is a different regulatory focus for others compared to the self in decision-making. Therefore there may be substantial implications for a variety of psychological processes in relation to self-other decision-making.’ Among personal decision makers, a prevention focus is activated and people are more satisfied with their choices after choosing among few options compared to many options, i.e. choice overload. However, individuals experience a reverse choice overload effect when acting as proxy decision-makers.

There are two steps involved in making a choice to purchase. First, the consumer selects an assortment and then chooses an option within the assortment. Variety and complexity vary in their importance in carrying out these steps successfully, resulting in the consumer deciding to make a purchase. Variety is the positive aspect of assortment. When selecting an assortment during the perception stage, the first stage of deciding, consumers want more variety. Complexity is the negative aspect of assortment. Complexity is important for the second step in making a choice- when a consumer needs to choose an option from an assortment. When making a choice for an individual item within an assortment, too much variety increases complexity. This can cause a consumer to delay or opt out of making a decision.

Images are processed as a whole when making a purchasing decision. This means they require less mental effort to be processed which gives the consumer a sense that the information is being processed faster. Consumers prefer this visual shortcut to processing, termed ‘visual heuristic’ by professor of marketing Claudia Townsend, no matter how big the choice set size. Images increase our perceived variety of options. As previously stated, variety is good when making the first step of choosing an assortment. On the other hand, verbal descriptions are processed in a way that the words that make up a sentence are perceived individually. That is, our minds string words along to develop our understanding. In larger choice sets where there is more variety, perceived complexity decreases when verbal descriptions are used.

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