Saturday, February 27, 2010

Interesting Article on Choices

Whenever I go on vacation with my family, one of the most "stressful" times of the day always seems to revolve around where to eat dinner. This seems odd, I know, since the whole point of going on vacation is to enjoy a break from a regular routine, and try a variety of different dining experiences - but there it is.

Turns out that behavioral scientists have been studying this phenomena for some time. There was an article about this in this morning's New York Times; I've excerpted a couple parts, but the full link can be found below:

February 27, 2010
Shortcuts

Too Many Choices: A Problem That Can Paralyze

TAKE my younger son to an ice cream parlor or restaurant if you really want to torture him. He has to make a choice, and that’s one thing he hates. Would chocolate chip or coffee chunk ice cream be better? The cheeseburger or the turkey wrap? His fear, he says, is that whatever he selects, the other option would have been better.

Gabriel is not alone in his agony. Although it has long been the common wisdom in our country that there is no such thing as too many choices, as psychologists and economists study the issue, they are concluding that an overload of options may actually paralyze people or push them into decisions that are against their own best interest.

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Research also shows that an excess of choices often leads us to be less, not more, satisfied once we actually decide. There’s often that nagging feeling we could have done better.

Understanding how we choose could guide employers and policy makers in helping us make better decisions. For example, most of us know that it’s a wise decision to save in a 401(k). But studies have shown that if more fund options are offered, fewer people participate. And the highest participation rates are among those employees who are automatically enrolled in their company’s 401(k)’s unless they actively choose not to.

This is a case where offering a default option of opting in, rather than opting out... doesn’t take away choice but guides us to make better ones, according to Richard H. Thaler, an economics professor at the Booth School of Business at the University of Chicago, and Cass R. Sunstein, a professor at Chicago’s law school, who are the authors of “Nudge: Improving Decisions About Health, Wealth and Happiness” (Yale University Press, 2008).

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..... one way to tackle the choice problem is to become more comfortable with the idea of “good enough,” said Barry Schwartz, a professor of psychology at Swarthmore College and author of “The Paradox of Choice” (Ecco, 2003).

Seeking the perfect choice, even in big decisions like colleges, “is a recipe for misery,” Professor Schwartz said.

This concept may even extend to, yes, marriage. Lori Gottlieb is the author of “Marry Him: The Case for Settling for Mr. Good Enough” (Dutton Adult, 2010). Too many women — her book focused on women — “think I have to pick just the right one. Instead of wondering, ‘Am I happy?’ they wonder, ‘Is this the best I can do?’ ”

And even though we now have the capacity, via the Internet, to research choices endlessly, it doesn’t mean we should. When looking, for example, for a new camera or a hotel, Professor Schwartz said, limit yourself to three Web sites. As Mr. Scheibehenne said: “It is not clear that more choice gives you more freedom. It could decrease our freedom if we spend so much time trying to make choices.”



http://www.nytimes.com/2010/02/27/your-money/27shortcuts.html?ref=business