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THE PARADOX OF CHOICE. Barry Schwartz Collaborators Andrew Ward Sonja Lyubomirsky Katherine White Darrin Lehman John Monterosso Jane Gillham Jamin Halberstadt Sheena Sethi-Iyengar. This Talk. Choice and satisfaction. This Talk. Choice and satisfaction

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the paradox of choice
THE PARADOX OF CHOICE

Barry Schwartz

Collaborators

Andrew Ward

Sonja Lyubomirsky

Katherine White

Darrin Lehman

John Monterosso

Jane Gillham

Jamin Halberstadt

Sheena Sethi-Iyengar

this talk
This Talk
  • Choice and satisfaction
this talk4
This Talk
  • Choice and satisfaction
  • Freedom, choice, wealth, and welfare
this talk5
This Talk
  • Choice and satisfaction
  • Freedom, choice, wealth, and welfare
  • What to do about food
slide8

285 Brands of Cookies

110 Televisions

230 Soups

75 Iced Teas

6.5 Million Stereo Systems!!

175 Salad Dressings

40 Toothpastes

275 Cereals

30 VCRs and 50 DVD Players

slide9
Phone service:

Local, long distance, cellular

slide12
Health Care:

Direct marketing of drugs

“Patient autonomy”

slide15
Physical appearance:

Botox

Cosmetic Surgery

slide18

MAXIMIZING

SATISFICING

slide20

Thus a paradox:

Freedom of choice

becomes

tyranny of choice

slide22

Americans are richer than ever before

Americans are sadder than ever before

slide23

Americans are richer than ever before

Americans are sadder than ever before

Why?

slide24

Americans are richer than ever before

Americans are sadder than ever before

Why?

Too much choice is part of the answer

what too much choice does
What Too Much Choice Does
  • Jams in a gourmet food store
what too much choice does26
What Too Much Choice Does
  • Jams in a gourmet food store
  • Chocolates in the laboratory
what too much choice does27
What Too Much Choice Does
  • Jams in a gourmet food store
  • Chocolates in the laboratory
  • Snacks, soft drinks and beer in convenience stores
what too much choice does28
What Too Much Choice Does
  • Jams in a gourmet food store
  • Chocolates in the laboratory
  • Snacks, soft drinks and beer in convenience stores
  • 401(k) participation in the workplace
why choice makes people miserable
Why Choice Makes People Miserable:

1. Regret and anticipated regret

why choice makes people miserable32
Why Choice Makes People Miserable:

1. Regret and anticipated regret

2. Opportunity costs

slide36
Offer participants $2 or a good pen:75% choose pen

Offer participants $2, or 1 good pen, or 2 cheaper pens:

45% choose either pen

slide37

Where to go on vacation?

1. Beaches of the Caribbean

slide38

Where to go on vacation?

1. Beaches of the Caribbean

2. Golf at Hilton Head

slide39

Where to go on vacation?

1. Beaches of the Caribbean

2. Golf at Hilton Head

3. Awesome power of the Rockies

slide40

Where to go on vacation?

1. Beaches of the Caribbean

2. Golf at Hilton Head

3. Awesome power of the Rockies

4. Culture of New York

slide41

Where to go on vacation?

1. Beaches of the Caribbean

2. Golf at Hilton Head

3. Awesome power of the Rockies

4. Culture of New York

Choose your Number 1

slide42

Where to go on vacation?

1. Beaches of the Caribbean

2. Golf at Hilton Head

3. Awesome power of the Rockies

4. Culture of New York

Choose your Number 1

Go, have a good time, but…

slide43

Why couldn’t I have found a place with beautiful beaches and great golf, and awesome power, and culture

slide45

The lesson of opportunity costs:

The more options you offer, the less attractive each of them will seem

why choice makes people miserable46
Why Choice Makes People Miserable:

1. Regret

2. Opportunity costs

3. Escalation of expectations

slide50

The lesson of expectations:

What matters to satisfaction is whether experience meets expectations or not

why choice makes people miserable51
Why Choice Makes People Miserable:

1. Regret

2. Opportunity costs

3. Escalation of expectations

4. Self-blame

choice and satisfaction conclusions
Choice and Satisfaction: Conclusions
  • As options increase, selection decreases
choice and satisfaction conclusions53
Choice and Satisfaction: Conclusions
  • As options increase, selection decreases
  • As options increase, satisfaction decreases
slide54

Freedom, choice, wealth, and welfare:

Implications of the research

the official dogma
Maximize welfare, not wealth

This means maximize freedom

This means maximize choice

Markets maximize freedom

Wealth enhances freedom

More wealth means more choice

More choice means more freedom

More freedom means more welfare

NOT!!

The “Official Dogma”
libertarian paternalism
Libertarian Paternalism
  • And car insurance
  • And organ donation
  • Pay attention to “default options” (the “paternalism” part)
  • But usually let people opt out (the “libertarian” part)
what to do about food
What to Do About Food
  • “Experience goods” [but there are too many to experience]
  • “Credence goods” [but informational asymmetry has become the rule]
  • Is the government’s role just to insure safety, or is it also to promote welfare?
  • If promoting welfare is part of the mission, barriers to entry might well be part of the policy
what to do about food cont
What to Do About Food (cont.)
  • The “Consumer Reports” problem
  • Principle of the flat maximum
  • The “Zagat Guide” model: selective review and rating
  • But how can a federal agency possible do this?
  • Perhaps in partnership with private, non-profit evaluation services