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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 l.jpg
THE PARADOX OF CHOICE

Barry Schwartz

Collaborators

Andrew Ward

Sonja Lyubomirsky

Katherine White

Darrin Lehman

John Monterosso

Jane Gillham

Jamin Halberstadt

Sheena Sethi-Iyengar


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This Talk

  • Choice and satisfaction


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This Talk

  • Choice and satisfaction

  • Freedom, choice, wealth, and welfare


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This Talk

  • Choice and satisfaction

  • Freedom, choice, wealth, and welfare

  • What to do about food



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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


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Phone service:

Local, long distance, cellular


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Health Care:

Direct marketing of drugs

“Patient autonomy”




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Physical appearance:

Botox

Cosmetic Surgery




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MAXIMIZING

SATISFICING


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Thus a paradox:

Freedom of choice

becomes

tyranny of choice



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Americans are richer than ever before

Americans are sadder than ever before


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Americans are richer than ever before

Americans are sadder than ever before

Why?


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Americans are richer than ever before

Americans are sadder than ever before

Why?

Too much choice is part of the answer


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What Too Much Choice Does

  • Jams in a gourmet food store


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What Too Much Choice Does

  • Jams in a gourmet food store

  • Chocolates in the laboratory


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What Too Much Choice Does

  • Jams in a gourmet food store

  • Chocolates in the laboratory

  • Snacks, soft drinks and beer in convenience stores


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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




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Why Choice Makes People Miserable:

1. Regret and anticipated regret


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Why Choice Makes People Miserable:

1. Regret and anticipated regret

2. Opportunity costs


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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


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Where to go on vacation?

1. Beaches of the Caribbean


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Where to go on vacation?

1. Beaches of the Caribbean

2. Golf at Hilton Head


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Where to go on vacation?

1. Beaches of the Caribbean

2. Golf at Hilton Head

3. Awesome power of the Rockies


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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


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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


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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…


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



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The lesson of opportunity costs:

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


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Why Choice Makes People Miserable:

1. Regret

2. Opportunity costs

3. Escalation of expectations


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The lesson of expectations:

What matters to satisfaction is whether experience meets expectations or not


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Why Choice Makes People Miserable:

1. Regret

2. Opportunity costs

3. Escalation of expectations

4. Self-blame


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Choice and Satisfaction: Conclusions

  • As options increase, selection decreases


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Choice and Satisfaction: Conclusions

  • As options increase, selection decreases

  • As options increase, satisfaction decreases


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Freedom, choice, wealth, and welfare:

Implications of the research


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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”


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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)


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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


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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


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