Summary: Scenario: Imagine yourself with $1000, you go to the store and there is one beautiful flat-screen 60-inch TV for $899. How do you feel? Now imagine that you have $1000 and you walk into another store, where you see a wall full of 20 beautiful flat-screen TVs, all between $799 and $899, but with different features. How do you feel? The Paradox of Choice: The paradox of choice is a theory by American psychologist Barry Schwartz claiming that, after a certain threshold is reached, an increase in the number of choices will cause a significant amount of psychological distress. This distress, according to Professor Schwartz, can manifest itself in many ways. One way is through buyer’s remorse. The theory states that buyer’s remorse is created through increasing opportunity costs associated with increased choices. Opportunity costs associated with alternate choices compound and create strong feelings of dissonance and remorse. As the number of choices increase, it is easier to imagine a different choice that may have been better than the one selected. The constant comparison to one’s expectations induces regret, which reduces the satisfaction of any decision, even if it fills the individual’s needs. When there are many alternatives to consider, it is easy to imagine the attractive features of rejected choices and there is a decrease in overall satisfaction. Consider the amount of choices in a simple supermarket. There are likely to be hundreds of different options of a single product. With so many options, expectations are as high as possible. It is the expectation that the product is perfect for an individual and will have no drawbacks. This leads to expectations rarely being met, a significant psychological issue. In the example of a supermarket, a wrong product choice can be immediately put into perspective. However, for more involved decisions, the consequences of a wrong decision are significant. Scenario: You need to buy a box of ping pong balls for your annual christmas tournament. You know that the typical price per ping-pong ball is 5 cents (and thus you know that Mitch has been overcharging you this whole time). One box advertises: 33% cheaper! The other box advertises: 33% more balls! Which is a better deal? Assuming one ball holds 20 balls: 33% off give you 20 balls for 66 cents. That’s 3.3 cents per ball 33% more gives you 26.67 balls for $1. That’s 3.75 cents per ball So…. They’re not equal! Choose the discounted price rather than the increase in quantity. Buyer’s Remorse The anxiety may be rooted in various factors, such as: the person’s concern that they purchased a current model now rather than waiting for a newer model, purchased in an ethically unsound way, purchased on credit that will be difficult to repay, or purchased something that would not be acceptable to others. In the phase before purchasing, a prospective buyer often feels positive emotions associated with a purchase (desire, a sense of heightened possibilities, and an anticipation of the enjoyment that will accompany using the product, for example); afterwards, having made the purchase, they are more fully able to experience the negative aspects: all the opportunity costs of the purchase, and a reduction in purchasing power. Also, before the purchase, the buyer has a full array of options, including not purchasing; afterwards, their options have been reduced to: continuing with the purchase, surrendering all alternatives renouncing the purchase Buyer’s remorse can also be caused or increased by worrying that other people may later question the purchase or claim to know better alternatives. Cognitive Dissonance theory of cognitive dissonance, a state of psychological discomfort when at least two elements of cognition are in opposition, and which motivates the person to appease it by changing how they think about the situation. Psychologist[...]
