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Do we have too much choice?
Ralphs shoppers aren’t overwhelmed by 724 kinds of produce because they don’t experience every variety as a separate choice. The exotic fruits are grouped together, as are the potatoes and yams, the lettuce bags, and the apples. Godiva sells its chocolates in selections—nuts and caramels in one box, dark chocolates in another, truffles in another—not piece by piece. Businesses have strong incentives not just to offer options but to help customers navigate those choices.
Outside the artificial constraints of a psychology experiment, people adapt pretty effectively to proliferating choices. We go back to our favorite restaurant and order the same dish because we know we’ll like it. We find a toothpaste that suits us and stick to it. We don’t always choose anew.
That is from Virginia Postrel, read more here. Michael at 2Blowhards.com has more.
Will customers trust businesses to select for them? If too much choice alienates you, won't the store put the high-margin items on the front table right before your eyes? Maybe so, but competition across firms should limit such mark-ups. And if the mark-up gets too high, people will cope. Schwarz himself notes: “A small-town resident who visits Manhattan is overwhelmed by all that is going on. A New Yorker, thoroughly adapted to the city’s hyperstimulation, is oblivious to it.”
The bottom line: I'm still upset that Rainier cherries -- finer than caviar to my depraved, barbecue- and curry-obsessed palate -- are available for only a few months a year. Comments are open.
Posted by Tyler Cowen on June 22, 2005 at 07:48 AM in Economics | Permalink
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» Toothpaste Shock? from A Stitch in Haste
There is a group of economists and psychologists, a subset of the growing behavioral finance school, who make an astounding claim: That too many consumer choices can actually make people worse off, and perhaps downright unhappy.
These soci... [Read More]
Tracked on Jun 22, 2005 10:39:51 AM
Comments
Virginia's essay in Reason misses the most important point - even if choices are sometimes confusing, or between near-identical alternatives, such choices keep competing companies in line. We'd soon miss choice if it disappeared.
Posted by: Tim Harford at Jun 22, 2005 8:12:03 AM
I can't believe this is even being discussed. Not enough choice? I guess if you don't really know what you want you might be confused by it all but it sounds absolutely ridiculous to me. Don't most people already know what they want before they walk into the store? I still think there is not enough choice. I go to Hong Kong to get my clothes made because I don't like what's available and I've been looking into how to get custom made shoes and watches as well. I can't wait until manufacturing gets to the point where most products can be customizable and have infinite variety.
Posted by: asiequana at Jun 22, 2005 8:46:57 AM
Re: Manhattan retail shops. Problems with an abundance of choice may be overblown, but many retail shops in Manhattan are nevertheless poorly organized. And these are not just mom-and-pop shops: citywide chain stores like Duane Reade are notorious for being disorganized.
I have no problem with Postrel's argument that concerns about the abundance of choice are overblown, however, it is not the case, at least in New York, that retail stores have an incentive to keep their stores well organized.
Posted by: Dave at Jun 22, 2005 9:25:45 AM
Uh...there are even choices for peopole who don't like choices: Costco, at least among big-box stores. Costco acts (in essence) as a buying service. You will not find, for example, a wide variety of any one object there but you will find (in my experience) a very astutely-chosen balance of price and quality i.e. the best product at a given price-point.
Posted by: David Sucher at Jun 22, 2005 9:44:12 AM
Costco, in my experience at least, also has a very good selection of meats. And consistendly excellent muffins.
Posted by: Timothy at Jun 22, 2005 10:23:42 AM
I'm pretty convinced that the same people who complain about "too many choices" are the same people who think that so much luxury and wealth has degraded the human experience and robbed us our of natural existence. They are the silly intellectual heirs of the "pastoralist" movement that believed that we'd all be happy if we went back to our country roots, herding sheep. Because modern technological life degrades our humanity, or something.
But when it comes down to it, I hear customers complaining about not enough choices (say, in women's clothing) a great deal more than I hear about too many choices. It's ridiculous arrogance of people to assume that merely because they are overwhelmed by all the choices in life that everyone is as well. The day I complain of too many choices is when you lock me up and mail me to North Korea where I don't have to worry about such things!
Posted by: Caliban at Jun 22, 2005 10:57:31 AM
Actually, Godiva DOES sell chocolates piece by piece. But you don't have to buy them that way unless you choose to.
Posted by: linsee at Jun 22, 2005 11:19:15 AM
Some people like lots of choices. Some people are intimidated by them, or don't want to take the time to sort through them all. Both people can be happy, because retailers will specialize- it's the classic Bloomingdales vs. Neiman Marcus choice. One store has absolutely everything, and it's up to you to find what you like. The other has a much smaller selection, stocked on the premise that if you looked through everything, this is what you would pick. Both exist because they cater to different types of consumers. The studies that indicate that some people do suffer from "too much choice" simply tell retailers that they need to specialize- stocking another brand of toothpaste might be beneficial, or it might not. It just depends on which type of consumer they cater to.
Posted by: Matt at Jun 22, 2005 11:25:05 AM
I explained in my blog how too much choice causes higher prices. So choice hurts our wallets (if you believe my post).
Link: http://www.halfsigma.com/2005/06/does_competitio.html
Posted by: Half Sigma at Jun 22, 2005 12:16:48 PM
The notion that we have too much choice is idiotic. Go into the best department store in your town. Compare it with Liberty or Harrod's. Nearly every store in the United States—high, middle, or low—is selling the same crap. We've come back to the Model-T: any color as long as it's black. We take what the deciders give us and like it.
Actually, I believe that this is for a perfectly good reason for this. Retailers are going for mass markets. But that doesn't mean you have more choices.
Posted by: Dave Schuler at Jun 22, 2005 12:29:07 PM
I believe there is a failure in choices for good independent consumer information. I am not offering a reason other than to say that the market does not seem to bear what I think would be a a helpful service. [Just blog comment post speculation-- something about advertising-based consumer information crowding out independents due to a improper accounting of external costs of advertising.]
Posted by: theCoach at Jun 22, 2005 1:07:33 PM
I don't think we can have too many choices. What can happen is that we can
pay too much for advertising and marketing if consumers are lazy about
shopping around. This is very likely to occur in markets for relatively
inexpensive items like toothpaste and shampoo. In some cases, the
manufacturers will make both the name-brand product and the generic (which
they sell for much less). I write about that here:
http://chocolateandgoldcoins.blogspot.com/2005/06/are-we-paying-too-much-for-advertising.html
This is a response to Half Sigma: http://www.halfsigma.com/ (who writes an excellent blog).
Posted by: Michael H. at Jun 22, 2005 1:12:29 PM
The Tyranny of Choice
Haven't you noticed that traffic jams are a thing of the past? Almost no one drives cars anymore, or at least, isn't buying any new ones. There are just so many alternatives! How can anyone choose which car to buy? I've also noticed how almost no one subscribes to cable TV or Satellite Dish systems anymore either. There are just too many channels! How can anyone choose what to watch? I've also noticed that no one shops at malls anymore. There are just too many stores! I haven't bought a new pair of sneakers for years because there are just too many brands and styles and I can't make up my mind. Haven't you also notice how no one wears sneakers anymore? Oh, give me the good old days when the choice was only between Converse, Keds, PF Flyers, and Red-Ball Jets. The same thing with jeans -- too many choices -- no one wears jeans anymore! Food shopping in our well-stocked markets is pure Hell. How does one choose which soup to buy among the hundreds of brands and types? And cereals, spices, bread, toilet paper, etc., etc. -- who can choose? I also used to like to read books, but there are now so many stores and outlets, I can't make up my mind where to shop for books or, given all the tens of thousands of books to choose from, which to read. I know that I and millions of others are also disconnecting from the internet. It has just too many web sites and options. Our family is in crisis right now over where to send my son to college. Do you know there are literally thousands of colleges from which to choose? How is one ever supposed to make the choice? Haven't you noticed that almost no one sends their kids to college anymore because they can't choose?
Last night I took the family out for a quick bite. Driving along the “strip” was pure torture – KFC, Wendy’s, McDonald’s, Burger King, TGIF, Ruby Tuesday, Chili’s, IHOP, Perkins, Bennigan’s, Taco Bell, Outback, Roy Rogers, Olive Garden, etc., etc., etc. – I just kept driving back and forth because we could not choose where to eat. After several hours cruising I noticed I was low on gas. But where should I buy it? Amoco, Mobile, Sunoco, Citgo, Cumberland Farms, Liberty, Exxon? I could not choose, so we ran out of gas. I reached for my cell phone to call for help, but alas, I had no service. You see, my service contract had expired and faced with dozens of different options and plans, I could not choose a replacement plan or provider. Of course, even if I had phone service, who would I have called? AAA, the police, one of the local service stations, my brother? Too, too, too many choices!
I could go on and on about how choice has made my life and the lives of every American miserable. We need and clearly want commercial establishments or the government to restrict our choices or to make our choices for us. That is quite clear from the abject commercial failure of all these stores and systems providing us ever greater choices. In fact, I was almost unable to complete this email because I just couldn't choose which font to use. I need someone else to choose for me and, admit it, so does everybody else.
Bob Doyle
Posted by: Bob Doyle at Jun 22, 2005 1:24:46 PM
Most critics of the "too much choice" variety seem to assess the question from the point of view of a given individual: Person A can't decide from among 100s of choices; people generally (after the choices are on offer; that is, ex post) are harmed by being confronted with so many choices. But this misses the point. The existence of choice means that many different individuals with different preferences are more likely to be satisfied. If there were few products -- such that only a few people's first choices were available -- many more people would be harmed by the absence not of choice per se, but of a single most-preferred option. It may be that excessive choice is a by-product of the modern market's ability to satisfy more (the optimal number of?) people. But then the relevant critique must take into account the benefit of satisfying more people in the first place (and weigh it against the cost to some people whose preferences would have been satisfied even with less choice and who are harmed by the more-complicated choosing process). It is impossible to satisfy many people (with widely-divergent tastes) without imposing this cost. But I'd wager it's worth it. At any rate -- it's not that for me the existence of lots of options is necessarily an intrinsic benefit (because my top picks might have been available anyway). It's that more of us have our top picks available where there are more options.
Posted by: geoff manne at Jun 22, 2005 1:25:31 PM
Re: cherries
Eating seasonal is important both for health and for good cuisine. Look to the traditional, folk-derived cookbooks -- people didn't eat meat every day or cherries in winter even in XIX, and still got by!
Posted by: mazur at Jun 22, 2005 1:36:21 PM
Yes, we are all victims -- victims of our properity. How I envy all those Chadians, Biafrans, and others the world round who do not have to live under the torture of plenty.
Bob Doyle
Posted by: Bob Doyle at Jun 22, 2005 1:54:23 PM
theCoach definitely had a good point where he wrote that paid advertising crowds out genuinely informative information. An externality of advertising.
Posted by: Half Sigma at Jun 22, 2005 2:10:24 PM
After a painful series of attempts to choose a television out of the dozens on sale at various stores, I wound up buying one from Costco because they only offered three models in my price range. My limited decision-making skills could handle three. And, because, of the limited supply, Costco sold the model I bought for 1/7th less than other stores.
So, the free market can even supply us with that precious commodity: a lack of choice!
Posted by: Steve Sailer at Jun 22, 2005 2:12:20 PM
Can it be? Have economists discovered that marketers use segmentation? Mind blowing!!!
Posted by: Anand at Jun 22, 2005 2:17:09 PM
Have you ever noticed Schwartz et al never seem to complain about being confused and overwhelmed by a library with too many books in it...
Posted by: Slocum at Jun 22, 2005 3:25:30 PM
"...too much choice causes higher prices. So choice hurts our wallets (if you believe my post)."
I think you're confusing two different things. Competition can be price and/or quality competition.
'Perfect competition' is not the only, nor even the most common sort. If people willing buy higher quality (in some manner of their choosing) at higher price, it's hard to say how that 'hurts' their wallet.
Also, advertising can be an efficient method of information. How else would you introduce a new product?
Posted by: Patrick R. Sullivan at Jun 22, 2005 4:12:59 PM
I have a spare 7 year old Rainier Cherry Tree growing in my yard if you would like to come and get it. It's just big enough to transport. And does bear some fruit.
Posted by: PT at Jun 22, 2005 4:44:44 PM
I've been reading Tyler's culinary adventures long enough to know that if my local cheese monger cannot offer me unpasteurized, raw milk, hand-ladled camembert, then I am missing at least one, very much needed choice, if not many more.
The only time I feel overwhelmed by choice is when I'm looking to purchase something that I'm not overly interested in, say a printer for my computer. I just want a decent printer at a decent price, and I would like to elminte the opportunities cost of spending much time contemplating which to buy.
But I can spend all day contemplating cheese and be happy about it. (OK, maybe not *all* day.) Somewhere, someone is happying spending all day contemplating computer printers, and he probably doesn't care about cheese at all.
Posted by: Michael Giesbrecht at Jun 22, 2005 4:54:35 PM
The people who complain about too many choices either need the premise that too much freedom is harmful to support some pet statist scheme, or simply like to whine. The simple fact is that, among the many choices that are available to consumers, is the option of shoping someplace that insulates you from all those nasty options, leaving you to choose from two or three pre-selected products. Those who claim to want fewer choices would be well advised to read W. W. Jacobs "Monkey's Paw" one more time. The first alternative to go might be the option of avoiding having to make more choices.
Posted by: Strophyx at Jun 22, 2005 8:49:06 PM
Thanks for the link.
Not that I'm likely to find a sympathetic audience here. But a question I'd like to raise is one that's somewhat apart from the "choice is good"/"choice is bad" shootout, fun though such an exercise is. It's this: What's it like living in conditions of exploding choices?
My own experience is that it's often dizzying -- sometimes in pleasurable and sometimes in unpleasurable ways. I also sometimes find it tiring. Steve's example of the Costco is a good one: Costco may narrow choices in a way you find desirable. But, of course, first you have to find out about Costco (shopping research!) and then you have to choose it. So the making-a-shopping-choice thang has just acquired another level.
Sometimes it can seem as though sifting and sorting through the shopping options and shopping strategies -- few of which seem to remain stable or useful for long -- gets more and more demanding. What if you aren't particularly interested in spending time and energy coping with this? And what if you aren't any good at it?
If I -- a guy who likes doing research and generally cheerleads for more choice -- sometimes find the ever-proliferating-choice thang a bit dizzying and annoying, isn' t it likely that many people will find it disagreeable? And isn't it likely that they'll do their best to subvert the conditions that dismay them? Let's say their numbers get pretty high, to the point where they can disrupt the freer-choice system. What are you going to do? Impose ever-freer-choice conditions on them? But that doesn't sound very liberal ...
Fun thought-thickets to get lost in, at least AFAIC...
Posted by: Michael Blowhard at Jun 23, 2005 12:21:44 AM
Like I've said elsewhere...if you don't like having choices available, then just close your eyes and pick one at random. You'll probably overpay, it probably won't meet all your needs, and you'll generally get screwed...but you can recreate for yourself the system you seek to impose on society, without actually infringing anyone else's freedom. If overpaying and leaving needs unmet seems an acceptable price to you for reducing the pain you experience from choices, then it's none of my freakin' business to tell you otherwise. But accept, please, that most of us don't perceive that particular trade-off as an equitable one.
One can always go to a place like Costco or Sam's for goods in which one does not have any particular investment in the availability of a wide variety of choices.
Posted by: Matt at Jun 23, 2005 3:17:45 AM
Michael Giesbrecht's comments about choice being overwhelming when it's something you don't care about ring true. I think there are a large class of things which each individual simply doesn't care about that much, and choice is undesirable. If you're really interested in the properties of as item, however, there's usually not enough choice, or more precisely, there's not a way to get exactly what you want. Given that everyone has different interests, we all find there to be simultaneously too much, and too little, choice.
Dozens (seemingly) of different types of toothpaste, and I find the choice overwhelming, having no real desire for any properties of my toothpaste beyond "do good things when I brush my teeth." On the other hand, we're picking out a new car, and there just isn't enough choice in features. And don't get me started on the color choices... where the only options are "colors that are really boring." The most frustrating part is that these choices seem to be arbitrarily limited. (You can't get the moonroof AND the manual transmission AND green.)
Posted by: Steve Rodrigues at Jun 23, 2005 10:16:36 AM
Matt -- When you write "You can recreate for yourself the system you seek to impose on society, without actually infringing anyone else's freedom," I think you're reading an awful, awful lot into what some people are saying. Many people have the occasional experience of thinking, "Holy cow, this is really a dizzying pain in the neck." It's a simple fact that some people sometimes have this experience. What's the point in trying to argue it away? Let alone in accusing them of trying to impose oppressive social arrangements on you?
Posted by: Michael Blowhard at Jun 23, 2005 11:29:38 AM
People who complain about too many choices strike me as people with too much time on their hands.
Stated another way, the problem is not too many choices but insufficient ability to decide.
Posted by: David Sucher at Jun 23, 2005 11:12:41 PM
If they don't want to change the rules, why are they spending so much time and effort writing and talking about how much they hate choice?
There are lots of things I dislike about the way the world works. (I'm a Libertarian...it comes with the territory.) But (except for the ones where I _do_ hope to change policy) I don't spend time writing about them. What would be the point?
Posted by: Matt at Jun 24, 2005 3:05:24 AM
David -- So how do we get to the point where we're better able to decide? Seems to me -- I could be wrong -- that the occasional pause to reflect on what our experience is like (pleasant? unpleasant? what matters to me? etc) can't hurt. Your book and website "City Comforts" represent *a lot* in the way of reflecting, evaluating, comparing-and-contrasting, and indeed deciding what you don't like as well as what you do like. Quality of life doesn't arise entirely from bolting to the next decision. Having some sense of what's of worth and what's rewarding (as well as what's not) is key. How to develop and cultivate that?
Matt -- So you never simply reflect on what life's like? You never savor a meal? You never sink into "the moment"? You're always hurrying on your way to making the next major decision? Where are you hurrying to?
Posted by: Michael Blowhard at Jun 24, 2005 11:58:45 AM
I guess I honestly don't know, Michael Blowhard.
Personally I savor choice...I like to go to Whole Foods and see 10 kinds of tofu and 100 kinds of beer. I love the different labels with all their varied imagery and colors. To some large degree, life is random and we are all inter-changeable e.g.it's nonsense to say that there is "only one true love." Look at how quickly -- and this is a sign of mental health -- a widower or widower of 30 years marriage will bond to a new person.
I am NOT by any means suggesting that contemplation is bad; I guess I don't see what that has to do with enjoying choice. In fact the more you examine your own reactions and what you like/don't like, the better a decision-maker you become. Self-examination is one of the path to being decsisive. Know thyself and then act.
Posted by: David Sucher at Jun 24, 2005 6:55:39 PM
Right, that "know thyself" stage is important ...
"Savoring choice" -- that's a nice way to put it.
My only points are that
1) this "choice" thing is clearly in the air, and
2) we have to allow ourselves (as well as other people) to have reactions to it, both positive and negative. If we don't, we'll never "know ourselves." And making any kind of choice without knowing ourselves is just being frantic.
Posted by: Michael Blowhard at Jun 24, 2005 7:56:28 PM
Michael,
Well of course people have the right to have opinions about all sorts of things. But it seems to me that part of public discourse is to not only say "I disagree" but also say "That's not even something which should be on the agenda."
Not only may we disagree about whether we have too much choice but we can also disagree about whether "choice" itself should be on the agenda and part of the debate.
In poltical/organizational terms, the control of the agenda is a very real and very legitimate way to shape the future.
Posted by: David Sucher at Jun 27, 2005 7:13:59 PM
Let me put it more simply:
"Debating the agenda is a legitimate part of the social conversation."
Posted by: David Sucher at Jun 27, 2005 7:18:05 PM
If you're looking for the ultimate combination of variety and convenience, the Super H Store in Fairfax, Va is truly astounding. It's a Korean grocery that puts WholeFoods and Wegman's to shame. It accomplishes the same or better level of variety, quality, convenience, and organization, and it's cheaper than just about any place in town. Truly astounding! I think this simply highlights the pathetic American grocery scene, which has been of course shaped by the patheticly lazy American consumer. We have traditionally preferred convenience more than variety and quality. But things are improving!
Posted by: William McBride at Jun 28, 2005 4:36:49 PM
Mr.McBride.
And so far as I understand, American free enterprise is working on giving everyone complete 100% choice of citizenship!
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