The Paradox of Choice

The Paradox of Choice has been my favorite of the selected readings. Schwartz’s study of how happiness is affected by success or failure of goal achievement is very interesting. This idea applies to myself included, for as long as I can remember I had to win. Now thinking about it this was probably driven from my involvement in competitive sports.

The study compares the choices of American consumers in daily life to something as specified as a selection of courses at an Ivy League school. Voluntary simplicity is brought up, but I had some difficulty understanding its fundamentals; upon further investigation of this idea I come to believe it has to do with having to many choices but that is just as much the problem as having to few choices. Schwartz is convinces that these choices have materialized because society has been far to focused on our personal wants.

Schwartz presents six steps that illustrate the consumer strategy when evaluating goods. 

1.     Figure out your goal or goals: this begins by asking yourself “what do I want?” The question is generally answered by expected utility or in other words, by achieving that want how would the individual than feel. After expected utility occurs the same choice is based on remembered utility.

2.     Evaluate the importance of each goal: Kahneman and Tyersky investigated: how individuals make decisions. They found that there were a few general rules that often would lead consumers to miswanting. There are two primary forms of evidence that people rely on: anecdotal and expert evidence. We assume with increased access into our memories information bank that we must have encountered more of that information in the past this is called availability heuristic.

3.     Array the options: personal psychological accounts create framing for the choices.

4.     Evaluate how likely each of the options is to meet your goals: Schwartz thinks people can be “creative accountants” in their psychological balance sheet.

5.     Pick the winning option: options are embedded in choices before they are chosen. Richard Thaler an economist gives insight into the sunk cost theory.

6.     Modify goals: Schwartz last step is based on consequences of a choice affecting ones goal.

Schwartz also discusses “why we suffer” he uses models of happiness and how it addresses choice. However, he does caution that each of these strategies have their own difficulties.

-       Choice and Happiness

-       Freedom or Commitment

-       Second-Order Decisions

-       Missed Opportunities