The Paradox of Choice? hmmmm.....

Upon first listening to the podcast, I was astounded by how accurate it described the decision making process. I found myself first identifying with his point that more freedom is a consequence of more choice, and that these all lead to better welfare for individuals. Barry Schwarz made perfect sense. When looking for products or services, we as consumers are always looking for the best possible choice for ourselves. This is why the latest craze in products has been the customization of products that allows consumers to create their own final product.

The saying goes, “What came first, the chicken or the egg?” In this instance my question is whether companies began offering more customization before consumers were demanding such products. Either way, the consumer decision making process has changed as they have been presented with more choices. As was said in the video podcast, in the beginning people were satisfied with a poor fitting pair of jeans because it was the best available, but now people have more choices, and better fitting jeans, yet they are increasingly dissatisfied after purchases. Therefore, the process has evolved. We as consumers used to shop primarily based on need and would choose products that would satisfy the need as best as possible. The only outlets for such products were retailers and possibly wholesalers. Now though, we are presented with a need or a want and immediately browse the internet for products that may satisfy the need. We then will do research on the product. This will involve the reading of reviews by other product users. By this time we will hope that we have found a product that we will be satisfied with. Then most often, we will have post purchase depression. What causes this depression/dissatisfaction? Most often it is caused by our own logic. We think about opportunity costs, and we feel that while the product satisfies our need, we could have possibly been better with the next available product. So, unless you’re rich and can buy everything, this poses a problem.

I myself have experienced this numerous times. It usually occurs with larger purchases because the frequency of purchase on such products such as a new HDTV or computer occur less often and are often accompanied by large payments. Just recently, I purchased a new HDTV. About 4 years ago, due to the small amount of choices for such a product, I would have been able to pick out a TV, and bring it home with no buyer’s remorse. Now though, these TV’s come with features such as 720P, 1080P, Dynamic Contrast Ratio, 2-4 HDMI slots, built in tuners, backlights, 60-120 HZ processors, and sizes from 19”-72”. Therefore making such a choice becomes difficult and will involve hours upon hours of research. Even still, I can watch my TV and be satisfied, but still unsure and a little dissatisfied because I don’t feel I got the best TV.

When mentioning the paradox of choice to my friend, he immediately responded by saying “DUDE! That’s why I totally hate restaurants.” What he meant was, when you go to a restaurant, you’re immediately given a menu with a vast amount of choices. Most will serve burgers, chicken, salads, steaks, soups, and much more. Most of the time though, you have a favorite dish at restaurants and you can always pick that as your safe choice, but sometimes you want to try something new, and this causes problems. There are two things that can happen; the dish can either be better or worse than your favorite dish. If it’s worse though, this is horrible because you have now spent money on food that you know could have been better. Now if the dish is better than your favorite dish; well this puts you in a predicament where you now think that you can do better with your choice of food.

The paradox of choice explains so much, so well. I thought it was very funny for Barry to say that we should always aim low, that way we can be happy with what we get even if it isn’t the best. The whole concept can be applied to much more than just consumerism. While people of the world have had greater welfare due to greater choices and greater freedoms, it seems that it peaks. Even America has come to a point where deregulation of the capital markets caused a global meltdown. Deregulation meant more freedoms and choices for individuals. However, if the individuals making choices in turn violate the harm principle, I think this leads to downturns. Meaning, when individuals make choices to benefit their well being, but doing so harms another’s well being, than this freedom of choice has been abused. I find it very fascinating to see this consumer theory applied to other parts of life.