Does having more choice make a person freer and happier? Does this satisfy them more? According to professor and psychologist, Barry Schwartz it does not. Instead with more choices, it makes people unhappier to the point that they are paralyzed by the sheer number of choices. This video discusses how the western societies value freedom greatly, and with greater number of choices enables people to have greater freedom, which results in greater welfare for the people. Western societies subscribe to this dogma of maximum choice = maximum freedom = maximum welfare.
All this choice has multiple negative effects: 1) With so many choices available, people have difficulty in finding a choice and this leads to paralysis. For example, if the investment (401k) program at work features 100 choices of mutual funds versus 10, people’s participation wanes because they constantly delay the purchase decision to deal with the enormous number of choices.
2) Once the selection from one of the numerous choices is completed, the overall satisfaction decreases, even if the choice is terrific. This is due to regret and the anticipation of regret, resulting from.the cognitive dissonance experienced after purchasing a product/service, also known as buyer’s remorse. If the consumer selects a particular good/service and is aware of the multitude of choices that are available, he/she may not be satisfied knowing there could be a better product/service that could have been chosen amongst the plentitude of choices. With the increasing number of choices available, also comes with an increasing number of opportunity costs. For example, upon purchasing a mutual fund, one may express buyer’s remorse in thinking that a different brand could have been better. Or even, investing in an altogether different financial instrument (e.g. T-Bills, Bonds, Stocks, etc.).
3) Escalation of expectations. Adding more choices only raises people’s expectations of the product/service. The professor’s example was in the past, buying jeans was simple because there was only one style of jeans. These jeans were not particularly stylish nor did they fit well. But today, there are a multitude of styles of jeans (e.g. boot cut, slim fit, relaxed fit, tapered, button fly, zip fly,stone wash, faded, etc.). When the professor went to a jean store to ask for a similar style that he bought several years ago, it was not easy finding them. When he did find the right style, an hour later, the jeans were more stylish and fitted better than the previous jeans in the past. However, the process and the elevated expectations waned the experience. With the multitude of choices that are available, people’s expectations have risen precipitously to the point that being pleasantly surprised was a phenomenon that mostly occurred in the past.
4) Secret to happiness is low expectations. When people have such high expectations, self-blame is what people experience when they choose the wrong product/service. For example, in the past, if the jeans were a horrible fit or if the quality was poor, you could blame the jean company. Today, with the multitude of choices, you have yourself to blame.
This problem is rife in modern affluent societies. There needs to be a balance between too little and too many choices. A possible solution espoused by the professor is income redistribution it becomes a win/win scenario for both the poor and the affluent. It addresses the problem of having too little or too many choices.