The Blackberry Moral (Or: The Trouble With Too Many Options)

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We were intrigued but not surprised by a recent article in the New York Times detailing troubles at Research in Motion, maker of the Blackberry. Among several problems facing the Canadian tech company is an overabundance of models; dozens, in fact—so many the company can’t say for sure how many different versions of the once cutting-edge device are actually on the market. This situation is hurting sales, which anyone with a basic knowledge of behavioral economics could have predicted. TMO—Too Many Options—is not just tricky for realizers and other marketers to navigate; it’s harmful to almost everyone’s well-being, financial and otherwise.

One of the core principles of behavioral economics is a concept called “choice conflict,” whereby people become less likely to choose as the number of options they face increases. What’s tricky, of course, is that people are often attracted to wide selections of items and services. In one of the more well-known experiments in all of behavioral economics, conducted by psychologists Sheena Iyengar and Mark Lepper, grocery store shoppers randomly encountered a jelly-tasting table offering one of two selection sets: six kinds of jam, across the taste and price spectrum; or 24 jars, equally diversified. Although shoppers were 40% more likely to stop at the table with 24 varieties on display, those who stopped when there were only six jellies to taste were 10 times more likely to actually buy a jar!

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The lesson here, more often than not, is that we think we want many options in life, but what we really desire is the illusion of choice and a trusted screener—someone (friend, relative, colleague or adviser) or something (an affinity group like AARP or an unbiased evaluator like Consumer Reports) to narrow our choices and help us choose. Not only is there good reason to think that fewer choices will simplify our lives, there’s also considerable evidence to suggest we’ll be happier for the simplicity.

As we detailed in our book, Iyengar and Lepper conducted another shopping experiment, setting up a chocolate-tasting booth that alternated between six options and 30. After making their choice, shoppers were then asked to rate their satisfaction level on a scale of 1 to 10. The result: Those who picked from the smaller selection of chocolates were nearly 15% happier with their choice. With six choices, you can only imagine a few ways that your decision to pick one chocolate over the others might have been “wrong.” But with 30 options, you’re left thinking that however much you like the chocolate you chose, there are 29 possible ways you might have chosen better.

Such self-doubt, conscious or otherwise, is not uncommon. Decades ago, the political scientist-sociologist-economist-psychologist-computer scientist Herbert Simon (a future Nobel Prize winner) began to think about and describe people as being one of two types of decision makers: “maximizers” or “satisficers.” You doubtless know many folks in each camp. Maximizers want to understand everything about a choice before making it. They devote much time, effort and emotion to seeking out and examining options, hoping to make the best possible choice. Satisficers, meanwhile, generally make choices through a combination of the best available information, intuition and advice from smart people they trust.

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There are benefits to each strategy, of course, and some people toggle back and forth between each approach depending on the choice in question. But for many people in many situations, maximizing may not be as virtuous or rewarding as they imagine it to be. Consider a 2001 paper, “Doing Better but Feeling Worse.” In it, Iyengar (along with Columbia University colleague Rachael Wells and Swarthmore psychology professor Barry Schwartz) described an experiment that tracked college seniors through a year of job hunting and subsequent employment. Not surprisingly, students who leaned heavily toward a maximizing approach got jobs that paid more — 20% more, on average — than students who were more satisficing by nature. But satisficers were much happier with their decisions — and they stayed that way throughout their early careers.

Obviously, we’re not advocating a world of severely limited options for consumers. But we are suggesting that those of us who consistently pursue the perfect decision among an ever-increasing set of choices might be heading in the opposite direction from the most satisfying result.

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