2. THE PARADOX OF CHOICE Barry Schwartz Collaborators Andrew Ward Sonja Lyubomirsky Katherine White Darrin Lehman John Monterosso Jane Gillham Jamin Halberstadt Sheena Sethi-Iyengar

3. This Talk Choice and satisfaction

4. This Talk Choice and satisfaction Freedom, choice, wealth, and welfare

5. This Talk Choice and satisfaction Freedom, choice, wealth, and welfare What to do about food

7. Is this good news or bad news? YES!

8. 285 Brands of Cookies 75 Iced Teas 40 Toothpastes 230 Soups 175 Salad Dressings 275 Cereals 110 Televisions 30 VCRs and 50 DVD Players 6.5 Million Stereo Systems!!

9. Phone service: Local, long distance, cellular

12. Health Care: Direct marketing of drugs “Patient autonomy”

13. Retirement plans

14. Work: When to do it

15. Physical appearance: Botox Cosmetic Surgery

16. Marital and family arrangements

17. Identity

18. MAXIMIZING SATISFICING

20. Thus a paradox: Freedom of choice becomes tyranny of choice

21. Americans are richer than ever before

22. Americans are sadder than ever before

23. Americans are richer than ever before Americans are sadder than ever before Why?

24. Americans are richer than ever before Americans are sadder than ever before Why? Too much choice is part of the answer

25. What Too Much Choice Does Jams in a gourmet food store

26. What Too Much Choice Does Jams in a gourmet food store Chocolates in the laboratory

27. What Too Much Choice Does Jams in a gourmet food store Chocolates in the laboratory Snacks, soft drinks and beer in convenience stores

28. What Too Much Choice Does Jams in a gourmet food store Chocolates in the laboratory Snacks, soft drinks and beer in convenience stores 401(k) participation in the workplace

29. With so much choice, people may do better…

30. but they feel worse

31. Why Choice Makes People Miserable: 1. Regret and anticipated regret

32. Why Choice Makes People Miserable: 1. Regret and anticipated regret 2. Opportunity costs

36. Offer participants $2 or a good pen: 75% choose pen Offer participants $2, or 1 good pen, or 2 cheaper pens: 45% choose either pen

37. Where to go on vacation? 1. Beaches of the Caribbean

38. Where to go on vacation? 1. Beaches of the Caribbean 2. Golf at Hilton Head

39. Where to go on vacation? 1. Beaches of the Caribbean 2. Golf at Hilton Head 3. Awesome power of the Rockies

40. Where to go on vacation? 1. Beaches of the Caribbean 2. Golf at Hilton Head 3. Awesome power of the Rockies 4. Culture of New York

41. Where to go on vacation? 1. Beaches of the Caribbean 2. Golf at Hilton Head 3. Awesome power of the Rockies 4. Culture of New York Choose your Number 1

42. Where to go on vacation? 1. Beaches of the Caribbean 2. Golf at Hilton Head 3. Awesome power of the Rockies 4. Culture of New York Choose your Number 1 Go, have a good time, but…

43. Why couldn’t I have found a place with beautiful beaches and great golf, and awesome power, and culture

44. The lesson of opportunity costs:

45. The more options you offer, the less attractive each of them will seem

46. Why Choice Makes People Miserable: 1. Regret 2. Opportunity costs 3. Escalation of expectations

50. The lesson of expectations: What matters to satisfaction is whether experience meets expectations or not

51. Why Choice Makes People Miserable: 1. Regret 2. Opportunity costs 3. Escalation of expectations 4. Self-blame

52. Choice and Satisfaction: Conclusions As options increase, selection decreases

53. Choice and Satisfaction: Conclusions As options increase, selection decreases As options increase, satisfaction decreases

54. Freedom, choice, wealth, and welfare: Implications of the research

55. The “Official Dogma” Maximize welfare, not wealth This means maximize freedom This means maximize choice Markets maximize freedom Wealth enhances freedom More wealth means more choice More choice means more freedom More freedom means more welfare NOT!!

56. Libertarian Paternalism And car insurance And organ donation Pay attention to “default options” (the “paternalism” part) But usually let people opt out (the “libertarian” part)

57. What to Do About Food “Experience goods” [but there are too many to experience] “Credence goods” [but informational asymmetry has become the rule] Is the government’s role just to insure safety, or is it also to promote welfare? If promoting welfare is part of the mission, barriers to entry might well be part of the policy

58. What to Do About Food (cont.) The “Consumer Reports” problem Principle of the flat maximum The “Zagat Guide” model: selective review and rating But how can a federal agency possible do this? Perhaps in partnership with private, non- profit evaluation services