Choice Overload

HUL261 Project Report

Submitted to
Prof. Varsha Singh
IIT Delhi

Submitted by

Tuesday Batch, Group 6

Ashwin Bhola 2014CH10090
Sankalp Katiyar 2015ME20760
Saurabh Parikh 2014BB10056
Shubham Chanana 2014CH10139
Introduction
Choose from thousands of options, has always been one of things many product
owners believe and we as buyers also think that the more options we have, the better
choice we will make. Most of the people, when asked if they would like to choose from
limited options or a lot, will say a lot. The main reason behind this is that having a lot of
choices gives them a sense of control whereas limiting their choices makes them feel
constrained. One definitely does not want their customers to feel dearth of
choices.Freedom is the right to choose; the right to create for oneself the freedom of
choice. Without the possibility of choice, and the exercise, a man is not a man, but a
member, an instrument, a thing -Thomas Jefferson

These days, our markets are inundated with products and choices. But, Is having many
choices good or bad? Most people say that they like a lot of choices. But do they?

It is a common supposition in modern society that the more choices, the better--that the
human ability to manage, and the human desire for, choice is infinite. From classic
economic theories of free enterprise, to mundane marketing practices that provide
customers with entire aisles devoted to potato chips or soft drinks, to important life
decisions in which people contemplate alternative career options or multiple investment
opportunities, this belief pervades our institutions, norms, and customs.

The term Choice Overload was first introduced by Alvin Toffler in his 1970 book,
Future Shock. This term effectively refers to the difficulty people face while making a
decision when faced with many options. When a person makes a decision, he ordinarily
is choosing one of a number of alternative objects or courses of action. The number of
choice alternatives may be as small as two, but it is not always thus restricted and it
could be four, five, or even more. Making a choice becomes overwhelming when
faced with numerous options due to risks associated with making a wrong
choice. Examples of overchoice include increased college options, career options, and
perspective romantic relationships etc.
Present Study

Literature Review
In 2000, psychologists Sheena Iyengar and Mark Lepper did a jam experiment. On one
day, shoppers at a food market saw a display table with 24 varieties of gourmet jam.
Those who sampled the spreads received a coupon for $1 off any jam. On another day,
shoppers saw a similar table, except that only six varieties of the jam were on display.
The large display attracted more interest than the small one. But when the time came to
purchase, people who saw the large display were one-tenth as likely to buy as people
who saw the small display i.e Fewer people stopped at the small display but 30% of the
people who stopped there made a purchase vs 3% at the larger section.

In 1830, Alexis de Tocqueville commented that, "In America I have seen the freest and
best educated of men in circumstances the happiest to be found in the world; yet it
seemed to me that a cloud habitually hung on their brow, and they seemed serious and
almost sad even in their pleasures". More than 100 years later, we are confronted by an
empirical instantiation of what some have referred to as "the tyranny of choice"
(Schwartz, 2000).

Sheena Iyengar and Mark Lepper in their study When Choice is Demotivating: Can
One Desire Too Much of a Good Thing? did 3 studies. One of the studies on jam has
been described above. Study 2 revealed that students in a college were more likely to
write an essay for extra credit when they were provided a list of only 6, rather than 30,
potential essay topics. Moreover, even after having chosen to write an essay, students
wrote higher quality essays if their essay topic had been picked from a smaller rather
than a larger choice set. Finally, Study 3 demonstrated that people reported enjoying
the process of choosing a chocolate more from a display of 30 than from a display of 6.
However, despite their greater initial enjoyment in the extensive-display condition,
participants proved more dissatisfied and regretful of the choices they made and were
subsequently considerably less likely to choose chocolates rather than money as
compensation for their participation

According to the study by P.Wright(1975), he made the following conclusions:

Compensatory strategies were not reported as particularly strenuous to execute,
although perceived strain increased as candidate options increased. Kiesler, C. A.
(1966) in Conflict and number of choice alternatives concluded that there was greater
conflict (longer decision time) with two alternatives than with four, contrary to current
theory on this topic. In addition, reducing the attractiveness of two of the alternatives in
the four alternative case had the effect of increasing conflict. Berlyne's (1960) theory
(axiom six) states that, if the choice alternatives are equally attractive, conflict will
increase if alternatives are added to the choice; thus, the explicit prediction of an
increase in conflict with an increase in the number of alternatives. Of additional interest
is Berlyne's axiom five which states that conflict is at a maximum when the choice
alternatives are equally attractive.

There has been some speculation in the literature (e.g., Restle, 1961; Luce, 1959)
about the process of decision-making with four alternatives. These authors have implied
that one first rejects the two least attractive alternatives and then concentrates on the
remaining two. Considering both four-alternative conditions in this experiment this
notion appears questionable. In the condition with equally attractive alternatives, one
apparently considered all of the alternatives at once and then chose one, without any
interim pairing procedure. The evidence for this is that, when it was easy for S to reject
two of the alternatives, his conflict increased.
The satisfaction of choices by number of options available can be described by an
inverted U model(Shah, A. M., & Wolford, G. (2007)). In this model, having no choice
results in very low satisfaction. Initially more choices lead to more satisfaction, but as
the number of choices increases it then peaks and people tend to feel more pressure,
confusion, and potentially dissatisfaction with their choice.

Problem Statement
Most people say that having more choices is always better. We would like to understand
how numerous choices affect the satisfaction level of making the choice compared to
fewer choices.

Hypothesis
Independent variables: Number of choices
Dependent variables: Satisfaction of making the choice

The pressure to make a decision can cause one to dwell on the options one didnt
choose and questioning the decision that is made. According to this hypothesis the
satisfaction of making the decision should decrease with the number of choices that are
available.
Method

Participants
The experiment was conducted in hostel lobbies, the participants were all male IITians.
We cannot exactly say this sample is random because our sample is limited to IIT
students only which in no way represent general population. Due to time constraint, we
cannot take this experiment outside IIT but given our current resources and experience,
it is sufficient to study if choice overload theory is valid for IIT Delhi students.

Design of the study

An experimental study was conducted with participants being divided into three parallel
groups. A correlation between the number of choices given to the participant and the
satisfaction for their choice was tested. The following aspects were considered while
designing the experiment :
1. Participants making a choice must not have a clear prior preference for an
option. Hence for the group with 10 choices we removed the option of Orange.
We thought that many people have a strong preference for the Orange flavour
and may result in them being unsatisfied if the flavour was not good.
2. The familiarity of the choice helps in easier decision making. Hence for the case
with 2 choices we made two groups, one with familiar flavours and another with
unfamiliar flavours. This will help remove the dependence of flavour from the
results.

Procedure
1. The participants were divided into three groups. Each group had 51 participants.
Two groups were given a choice of two sweets and the other will be given a
choice of ten differently flavoured sweets. Two groups for choice of two sweets
have been made to check for the effect of flavor in the decision making. One
group will have flavors unfamiliar for the participants, whereas the other group
will be presented with flavors of greater familiarity.
2. Each participant was asked to make a choice from the options that were
presented to them.
3. After a decision is made we asked them if they were satisfied with their decision
or not.
4. If we got No as a response, then another follow up question was asked to state
their reason for not being satisfied. This was done to confirm that their answer to
the question on their satisfaction is the one which our hypothesis predicts. It may
have been possible that a No response is received due to a simple disliking of
the flavor/texture of the candy presented to them.

The 10 choices presented along with the Orange flavour.

One of the participants making a decision

Results
The responses from the participants were recorded in the form of either a yes or no,
where yes corresponds to the participant being satisfied with the choice made. The
total number of yes responses are calculated for both the groups. The fraction of yes
responses from each group are compared against each other. The group with a
significantly higher fraction is considered to be the group which was more satisfied. The
fraction of no responses have two categories based on the reasons given by the
participants. The reasons received were that either they didnt like the flavor of the
candy or that they wanted to try some other flavor.

Group A 10 choices Pineapple, Watermelon, Raspberry, Blackberry, Cream,

Vanilla, Pina Colada, Lemon, Pear and Cherry

Group B 2 choices Blackberry and Raspberry

Group C 2 choices Orange and Watermelon

Type of response Group A Group Group C

B

Yes 34 47 47

No - Flavor not good 11 3 2

No - Wanted another 6 1 2

Total responses 51 51 51
Discussion on Experiment
The experiment consisted of 3 groups: Group A, Group B and group C. Group A was
presented with 10 different types of jelly beans in contrast to Group B and Group C, who
were presented with only 2 different kinds of jelly beans. Now this is the interesting part,
the groups which were presented with less number of options i.e. Group B and C were
more satisfied than the group presented with more choices. Moreover, the time taken by
group A members to decide which flavoured bean to have was more than members of
Group B and Group C. To sum it up, having more number of choices does 2 things:

1. Choice Paralysis: Not being able to decide what to choose

2. Decreased post Purchase satisfaction: Group A people who werent satisfied felt
that they should have chosen out of the other 9 choices that were available
thinking that they might have been better than the one they chose

If less is better, then why do people want more? Its called the dopamine effect.
Information is addictive. Our brain craves for more options than it can handle. Only
when a user is confident in his choice, is when he stops looking for more options. But
what more choices do is, they overload our already exhausted brains.
Group B and Group C were both presented with 2 choices. The effect we were trying to
study here was what happens when one group was presented with 2 choices that are
not amongst the most common of the flavours vs. the 2 choices that everyone has a
personal take on. As one would not expect, the proportion of people who wanted to try
another flavour was more in Group C which was presented with the common flavours.
However, its better not to conclude anything regarding the effect of flavour since the
data points are insufficient. But it is evident that the fewer number of choices results in
more satisfaction.

We tried to eliminate as many factors as possible that could bias this study towards the
results we were expecting. However, one of the things that needs to be mentioned is
the question we asked to the groups. After giving them the candy, the question we
asked was Are you satisfied with your choice. We feel that many people didnt
understand this question the way we intended them to. The question was, in our opinion
better than Do you regret your choice, because this question already has a tone of
negativity in it. To maintain, we didnt change the question for any group or for any
individual in any group.

Other examples that show the impact of excess choices:

1. As variety of snacks and soft drinks offered at convenience store increase, sales
volume and customer satisfaction decreases. The same is true for restaurants
with long and varied menus.
2. As number of retirement investment options available to employees increases,
the chance they will choose any decreases
3. One way in which this experiment reflects in our life is when we had to make a
decision between science, commerce and arts in tenth standard and now that we
have to make a decision regarding what we will do after graduation. Among
 many of the pre final year students choosing between management studies, job
and branch to pursue masters in, among many other options is a difficult choice.
One of the explanations is choice paralysis.

Conclusion

After testing our hypothesis by the experiment performed, we can say that the
satisfaction of making the decision decrease with the number of choices we have and
the assumptions which we made about the effect of choices on decision making are
correct as seen in the results. However, as we mentioned earlier that a lot of people
think that having more number of choices will give them a self-control and that will in a
way improve the quality of decision made by them but as explained by the phenomenon
of Choice Paralysis it has been proved that such an assumption is wrong to the majority
of population as going by the trends although this thing depends from person to person.
Furthermore as shown in the results and discussed afterwards that we further divided
the experiment with 2 choices just to see what people choose when given less known
choices (Group B) and when given well known choices (Group C), this was considered
as the extension of the project and not much related to the hypothesis we wanted to
test. However we couldnt conclude a concrete statement based on the further
bifurcation of the 2 choices in the experiment
Thus, the suggestion we present to you is to satisfice more and maximize less. It is the
maximizers who suffer most in a culture that provides too many choices. It is the
maximizers who have expectations that cant be met. It is the maximizers who worry
most about their choices and thus regret about missed opportunities and thus, it
maximizes their disappointment. Learning to accept good enough will simplify decision
making and increase satisfaction.
For the sellers, they need to understand that choice can no longer be used to justify a
marketing strategy in and of itself. More isnt always better, either for the customer or for
the retailer. Discovering how much assortment is warranted is a considerable empirical
challenge. But companies that get the balance right will be amply rewarded.
 References

1. Markus, H. R.; Schwartz, B. (2010). "Does Choice Mean Freedom and Well-Being?". Journal of Consumer
Research. 37 (2): 344. doi:10.1086/651242.
2. TORI DeANGELIS, June 2004, Vol 35, No. 6, Print version: page 56, American Psychological Associaton,
http://www.apa.org/monitor/jun04/toomany.aspx
3. The paradox of choice: Why more is less book, Author - Barry Schwartz
4. Shah, A. M., & Wolford, G. (2007). Buying behavior as a function of parametric variation of number of choices.
Psychological Science, 18, 369-370. doi:10.1111/j.1467-9280.2007.01906.x
5. Overchoice. (2017, February 9). In Wikipedia, The Free Encyclopedia. Retrieved 16:52, February 18, 2017,
from https://en.wikipedia.org/w/index.php?title=Overchoice&oldid=764538886
Appendix