In a nutshell
- More choices may lead to less satisfying decisions.
- We can apply constraints that will make choices more simple for people.
- Brands that make day-to-day decisions easier can have a big impact.
“The art of being wise is the art of knowing what to overlook.” — William James
What is choice overload?
We tend to assume that more is better – the more choices and the more freedom we have, the happier we are. However, with freedom and choice, we often experience choice overload. We have a much harder time and can be far less satisfied with our decisions when we’re deciding between a myriad of options.
Choice overload also comes in a number of other guises, these include buyer’s remorse, analysis paralysis, information overload and decision fatigue.
What happens when people experience choice overload?
1. Firstly, we’re unhappy.
We struggle with the decision-making process. When we’re presented with too much freedom of choice and too many options, it can be difficult and require a lot of cognitive effort to decide between the options. Numerous options can also cause us to have a greater likelihood of regret, feeling unsatisfied in our choice and feel less confident about our final decision.
2. We procrastinate or defer the decision.
Analysis paralysis is when we are too overwhelmed by choices and decisions that we put off making the decision at all. Distractions, procrastination and avoiding the decision are all by products of choice overload. Anyone who has left items dwindling in their online shopping cart can attest to this.
3. We apply our own constraints – and not all of these are wise constraints.
In attempt to whittle down the options, we will make decisions based on gut instincts, mental shortcuts and cognitive biases. These can include the availability bias, choosing the option that is most recent or easily comes to mind; the novelty bias, when we show a preference for something that is new or different; or our susception to anchoring, when we are influenced by a reference point or ‘anchor’ (even if these anchors are seemingly unrelated to the decision at hand).
How can we apply constraints that will make choices more simple for people?
1. Remove the choice - defaults
An obvious option but effective option is to remove the choice in the first place. Rather than providing people with a choice, build it in to the process. When it comes to defaults, we do need be considerate and ensure that defaults still allow people to opt out and do not lock them into situations that put them at financial risk. Kiwisaver is a great example of default savings options. Employees are automatically entered into Kiwisaver, but are still provided an opt out option and still provided some elements of choice when it comes to choosing the provider, the fund and the percentage of PAYE dedicated to Kiwisaver.
2. Simplify the number of choices
There are often times when we want people to take a whole host of different actions – whether it be improving health outcomes and getting people to change diets and exercise habits; improving financial literacy or tackling climate change. When considering a ‘call to action’ or defining what behaviour we’re trying to change, we need to consider how long that list might be. When working with EECA to reduce carbon emissions, we identified many low-emission behaviours, but by simplifying it down to a few key actions we can cut through the complexity and give people a clear direction to grasp on to.
3. Chunk the options
Chunking is a great way to provide simplicity but still include a range of options for people. Rather than having a myriad options, consider grouping them together into ‘chunks’ so there are less overall choices for people to make. An example of this in the building and construction sector is accreditation tools that simplify and chunk a range of options together. When it comes to building energy efficient and low-carbon homes, there are many, may options for people to consider whether it be insultation, triple glazing, low-carbon materials, recycled materials etc. Accreditation tools, such as HomeStar, GreenStar, HomeFit chunk together many low-carbon options and actions that simplify the decision making process for homeowners.
4. Reframe the number of decisions
The transport sector is one of many choices – micromobility, cycling, driving, walking, using public transport – people make travel decisions daily or even multiple times a day. Rather than framing travel choices as a daily decision, Transport NSW introduced a Weekly Travel Reward – when people travelled eight journeys in one week, the rest of the week their fares are half price. This reward reset the timeframe to make commuting via public transport a weekly commitment, rather than a choice people had to make each morning.
5. Provide pre-commitment options so the choice is already made in advance
Avoid choice overload and decision fatigue by providing pre-commitment options and commitment devices which remove the need to continually make decisions. Auckland Transport’s Travelwise programme encourages organisations to use public transport and active modes. The first step is for executives and staff to complete an initial travel survey to understand their current travel behaviours. Not only does the survey provide the necessary information to get the programme underway but it also works as a pre-commitment act – it’s an initial first step that leads to organisations deciding to provide sustainable transport options.
In 2021, we’re faced with a paradox: more decisions to make than ever before, while the rules and guardrails that help guide our decisions are in flux. The pandemic means we’re making big decisions at an accelerated pace – just ask someone who was on the verge of heading off on an OE, or someone who returned home to ride out the pandemic. Brands that help make the day-to-day decisions easier, and help us overcome choice overload, will make a big impact.
Here’s our recommended reading for a more in-depth look at choice overload:
‘The Paradox of Choice- Why more is less’ by Barry Schwartz (or see his Ted Talk)
Barry Schwartz is the Dorwin Cartwright Professor of Social Theory and Social Action at Swarthmore College and is a leading psychologist in decision making.
‘Are You a Maximiser of Satisficer’ Episode 14 of the No Stupid Questions, Freakonomics Podcast provides as overview of different approaches to people’s decision making when presented with many choices.