Do we have too much choice?

by on June 22, 2005 at 7:48 am in Economics | Permalink

Ralphs shoppers aren’t overwhelmed by 724 kinds of produce because they don’t experience every variety as a separate choice. The exotic fruits are grouped together, as are the potatoes and yams, the lettuce bags, and the apples. Godiva sells its chocolates in selections–nuts and caramels in one box, dark chocolates in another, truffles in another–not piece by piece. Businesses have strong incentives not just to offer options but to help customers navigate those choices.

Outside the artificial constraints of a psychology experiment, people adapt pretty effectively to proliferating choices. We go back to our favorite restaurant and order the same dish because we know we’ll like it. We find a toothpaste that suits us and stick to it. We don’t always choose anew.

That is from Virginia Postrel, read more here.  Michael at 2Blowhards.com has more.

Will customers trust businesses to select for them?  If too much choice alienates you, won’t the store put the high-margin items on the front table right before your eyes?  Maybe so, but competition across firms should limit such mark-ups.  And if the mark-up gets too high, people will cope.  Schwarz himself notes: “A small-town resident who visits Manhattan is overwhelmed by all that is going on. A New Yorker, thoroughly adapted to the city’s hyperstimulation, is oblivious to it.”

The bottom line: I’m still upset that Rainier cherries — finer than caviar to my depraved, barbecue- and curry-obsessed palate — are available for only a few months a year.  Comments are open.

1 Tim Harford June 22, 2005 at 8:12 am

Virginia’s essay in Reason misses the most important point – even if choices are sometimes confusing, or between near-identical alternatives, such choices keep competing companies in line. We’d soon miss choice if it disappeared.

2 Dave June 22, 2005 at 9:25 am

Re: Manhattan retail shops. Problems with an abundance of choice may be overblown, but many retail shops in Manhattan are nevertheless poorly organized. And these are not just mom-and-pop shops: citywide chain stores like Duane Reade are notorious for being disorganized.

I have no problem with Postrel’s argument that concerns about the abundance of choice are overblown, however, it is not the case, at least in New York, that retail stores have an incentive to keep their stores well organized.

3 Timothy June 22, 2005 at 10:23 am

Costco, in my experience at least, also has a very good selection of meats. And consistendly excellent muffins.

4 linsee June 22, 2005 at 11:19 am

Actually, Godiva DOES sell chocolates piece by piece. But you don’t have to buy them that way unless you choose to.

5 Half Sigma June 22, 2005 at 12:16 pm

I explained in my blog how too much choice causes higher prices. So choice hurts our wallets (if you believe my post).

Link: http://www.halfsigma.com/2005/06/does_competitio.html

6 theCoach June 22, 2005 at 1:07 pm

I believe there is a failure in choices for good independent consumer information. I am not offering a reason other than to say that the market does not seem to bear what I think would be a a helpful service. [Just blog comment post speculation– something about advertising-based consumer information crowding out independents due to a improper accounting of external costs of advertising.]

7 Bob Doyle June 22, 2005 at 1:24 pm

The Tyranny of Choice

Haven’t you noticed that traffic jams are a thing of the past? Almost no one drives cars anymore, or at least, isn’t buying any new ones. There are just so many alternatives! How can anyone choose which car to buy? I’ve also noticed how almost no one subscribes to cable TV or Satellite Dish systems anymore either. There are just too many channels! How can anyone choose what to watch? I’ve also noticed that no one shops at malls anymore. There are just too many stores! I haven’t bought a new pair of sneakers for years because there are just too many brands and styles and I can’t make up my mind. Haven’t you also notice how no one wears sneakers anymore? Oh, give me the good old days when the choice was only between Converse, Keds, PF Flyers, and Red-Ball Jets. The same thing with jeans — too many choices — no one wears jeans anymore! Food shopping in our well-stocked markets is pure Hell. How does one choose which soup to buy among the hundreds of brands and types? And cereals, spices, bread, toilet paper, etc., etc. — who can choose? I also used to like to read books, but there are now so many stores and outlets, I can’t make up my mind where to shop for books or, given all the tens of thousands of books to choose from, which to read. I know that I and millions of others are also disconnecting from the internet. It has just too many web sites and options. Our family is in crisis right now over where to send my son to college. Do you know there are literally thousands of colleges from which to choose? How is one ever supposed to make the choice? Haven’t you noticed that almost no one sends their kids to college anymore because they can’t choose?

Last night I took the family out for a quick bite. Driving along the “strip† was pure torture – KFC, Wendy’s, McDonald’s, Burger King, TGIF, Ruby Tuesday, Chili’s, IHOP, Perkins, Bennigan’s, Taco Bell, Outback, Roy Rogers, Olive Garden, etc., etc., etc. – I just kept driving back and forth because we could not choose where to eat. After several hours cruising I noticed I was low on gas. But where should I buy it? Amoco, Mobile, Sunoco, Citgo, Cumberland Farms, Liberty, Exxon? I could not choose, so we ran out of gas. I reached for my cell phone to call for help, but alas, I had no service. You see, my service contract had expired and faced with dozens of different options and plans, I could not choose a replacement plan or provider. Of course, even if I had phone service, who would I have called? AAA, the police, one of the local service stations, my brother? Too, too, too many choices!

I could go on and on about how choice has made my life and the lives of every American miserable. We need and clearly want commercial establishments or the government to restrict our choices or to make our choices for us. That is quite clear from the abject commercial failure of all these stores and systems providing us ever greater choices. In fact, I was almost unable to complete this email because I just couldn’t choose which font to use. I need someone else to choose for me and, admit it, so does everybody else.

Bob Doyle

8 mazur June 22, 2005 at 1:36 pm

Re: cherries
Eating seasonal is important both for health and for good cuisine. Look to the traditional, folk-derived cookbooks — people didn’t eat meat every day or cherries in winter even in XIX, and still got by!

9 Half Sigma June 22, 2005 at 2:10 pm

theCoach definitely had a good point where he wrote that paid advertising crowds out genuinely informative information. An externality of advertising.

10 Anand June 22, 2005 at 2:17 pm

Can it be? Have economists discovered that marketers use segmentation? Mind blowing!!!

11 Patrick R. Sullivan June 22, 2005 at 4:12 pm

“…too much choice causes higher prices. So choice hurts our wallets (if you believe my post).”

I think you’re confusing two different things. Competition can be price and/or quality competition.

‘Perfect competition’ is not the only, nor even the most common sort. If people willing buy higher quality (in some manner of their choosing) at higher price, it’s hard to say how that ‘hurts’ their wallet.

Also, advertising can be an efficient method of information. How else would you introduce a new product?

12 Michael Giesbrecht June 22, 2005 at 4:54 pm

I’ve been reading Tyler’s culinary adventures long enough to know that if my local cheese monger cannot offer me unpasteurized, raw milk, hand-ladled camembert, then I am missing at least one, very much needed choice, if not many more.

The only time I feel overwhelmed by choice is when I’m looking to purchase something that I’m not overly interested in, say a printer for my computer. I just want a decent printer at a decent price, and I would like to elminte the opportunities cost of spending much time contemplating which to buy.

But I can spend all day contemplating cheese and be happy about it. (OK, maybe not *all* day.) Somewhere, someone is happying spending all day contemplating computer printers, and he probably doesn’t care about cheese at all.

13 Michael Blowhard June 23, 2005 at 12:21 am

Thanks for the link.

Not that I’m likely to find a sympathetic audience here. But a question I’d like to raise is one that’s somewhat apart from the “choice is good”/”choice is bad” shootout, fun though such an exercise is. It’s this: What’s it like living in conditions of exploding choices?

My own experience is that it’s often dizzying — sometimes in pleasurable and sometimes in unpleasurable ways. I also sometimes find it tiring. Steve’s example of the Costco is a good one: Costco may narrow choices in a way you find desirable. But, of course, first you have to find out about Costco (shopping research!) and then you have to choose it. So the making-a-shopping-choice thang has just acquired another level.

Sometimes it can seem as though sifting and sorting through the shopping options and shopping strategies — few of which seem to remain stable or useful for long — gets more and more demanding. What if you aren’t particularly interested in spending time and energy coping with this? And what if you aren’t any good at it?

If I — a guy who likes doing research and generally cheerleads for more choice — sometimes find the ever-proliferating-choice thang a bit dizzying and annoying, isn’ t it likely that many people will find it disagreeable? And isn’t it likely that they’ll do their best to subvert the conditions that dismay them? Let’s say their numbers get pretty high, to the point where they can disrupt the freer-choice system. What are you going to do? Impose ever-freer-choice conditions on them? But that doesn’t sound very liberal …

Fun thought-thickets to get lost in, at least AFAIC…

14 Steve Rodrigues June 23, 2005 at 10:16 am

Michael Giesbrecht’s comments about choice being overwhelming when it’s something you don’t care about ring true. I think there are a large class of things which each individual simply doesn’t care about that much, and choice is undesirable. If you’re really interested in the properties of as item, however, there’s usually not enough choice, or more precisely, there’s not a way to get exactly what you want. Given that everyone has different interests, we all find there to be simultaneously too much, and too little, choice.

Dozens (seemingly) of different types of toothpaste, and I find the choice overwhelming, having no real desire for any properties of my toothpaste beyond “do good things when I brush my teeth.” On the other hand, we’re picking out a new car, and there just isn’t enough choice in features. And don’t get me started on the color choices… where the only options are “colors that are really boring.” The most frustrating part is that these choices seem to be arbitrarily limited. (You can’t get the moonroof AND the manual transmission AND green.)

15 David Sucher June 23, 2005 at 11:12 pm

People who complain about too many choices strike me as people with too much time on their hands.

Stated another way, the problem is not too many choices but insufficient ability to decide.

16 Michael Blowhard June 24, 2005 at 11:58 am

David — So how do we get to the point where we’re better able to decide? Seems to me — I could be wrong — that the occasional pause to reflect on what our experience is like (pleasant? unpleasant? what matters to me? etc) can’t hurt. Your book and website “City Comforts” represent *a lot* in the way of reflecting, evaluating, comparing-and-contrasting, and indeed deciding what you don’t like as well as what you do like. Quality of life doesn’t arise entirely from bolting to the next decision. Having some sense of what’s of worth and what’s rewarding (as well as what’s not) is key. How to develop and cultivate that?

Matt — So you never simply reflect on what life’s like? You never savor a meal? You never sink into “the moment”? You’re always hurrying on your way to making the next major decision? Where are you hurrying to?

17 Michael Blowhard June 24, 2005 at 7:56 pm

Right, that “know thyself” stage is important …

“Savoring choice” — that’s a nice way to put it.

My only points are that

1) this “choice” thing is clearly in the air, and
2) we have to allow ourselves (as well as other people) to have reactions to it, both positive and negative. If we don’t, we’ll never “know ourselves.” And making any kind of choice without knowing ourselves is just being frantic.

18 David Sucher June 27, 2005 at 7:18 pm

Let me put it more simply:

“Debating the agenda is a legitimate part of the social conversation.”

19 David Sucher June 28, 2005 at 6:59 pm

Mr.McBride.
And so far as I understand, American free enterprise is working on giving everyone complete 100% choice of citizenship!

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32 æ°´æ— ç—• July 4, 2007 at 1:50 am
33 xdrs July 12, 2007 at 3:33 am

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34 asdd July 18, 2007 at 1:35 am

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35 Missliang August 14, 2007 at 9:24 pm

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36 Weight loss February 8, 2008 at 1:38 am

Weight loss has become a well furnished business for many scrupulous people. Nowadays people have become very much beauty and skin conscious and as a result they are going for weight loss in huge numbers. Weight loss has become the main ingredient of beauty, smartness, and health. Thus looking into this growing demand for weight loss, there are many who take advantage and make it a business. There are fake organizations either provide fake medicines or fake trainers, and charge exorbitant amounts from the clients. So while going for weight loss it is very important to check the authenticity of the organization or the drugs.

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