The Paradox of Choice: Why More Is Less

“A large array of options may discourage consumers because it forces an increase in the effort that goes into making a decision. So consumers decide not to decide, and don’t buy the product. Or if they do, the effort that the decision requires detracts from the enjoyment derived from the results. Also, a large array of options may diminish the attractiveness of what people actually choose, the reason being that thinking about the attractions of some of the unchosen options detracts from the pleasure derived from the chosen one.”
“Whenever you eat a meal in a restaurant, or listen to a piece of music, or go to a movie, you either like the experience or you don’t. The way that the meal or the music or the movie makes you feel in the moment—either good or bad—could be called experienced utility.”
“Nobel Prize–winning psychologist Daniel Kahneman and his colleagues have shown that what we remember about the pleasurable quality of our past experiences is almost entirely determined by two things: how the experiences felt when they were at their peak (best or worst), and how they felt when they ended. This “peak-end” rule of Kahneman’s is what we use to summarize the experience, and then we rely on that summary later to remind ourselves of how the experience felt.”
“The fact is, we all hate to lose, which Kahneman and Tversky refer to as loss aversion.”
“The lesson is that we should try to do more downward counterfactual thinking. While upward counterfactual thinking may inspire us to do better the next time, downward counterfactual thinking may induce us to be grateful for how well we did this time.”
“It is called prospect theory, and it was developed by Daniel Kahneman and Amos Tversky. What the theory claims is that evaluations are relative to a baseline. A given experience will feel positive if it’s an improvement on what came before and negative if it’s worse than what came before. To understand how we will judge an experience, it is necessary first to find out where we set our hedonic zero point.”
“The lesson here is that high expectations can be counterproductive. We probably can do more to affect the quality of our lives by controlling our expectations than we can by doing virtually anything else. The blessing of modest expectations is that they leave room for many experiences to be a pleasant surprise, a hedonic plus. The challenge is to find a way to keep expectations modest, even as actual experiences keep getting better.”