The Anatomy of Choice

Choice is absolutely fundamental to well-being

Sajid Khetani
Strategy Square with Sajid

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How long do you spend scrolling through the product catalogue before deciding what to buy on Amazon or scrolling through titles wondering what to watch on Netflix? A 2017 Ericsson Consumer Lab Media Report mentions that users spend ~51 minutes a day searching for what content to watch. We have all faced the selection paradox. While looking for content, we think about what we might enjoy watching, but at the same time are anxious about missing on something more interesting — the scrolling continues. This is defined as the paradox of choice.

The paradox of choice has been recognised as one of the major sources of mass confusion, in the context of B2C customisation en masse, in both the digital and physical realm. E-commerce, streaming platforms, retail outlets, FMCG products, and much more are places where you see this in action. Very often then not, the focus is on quantum of choices versus quality (meaningful) of choices.

From the business standpoint, the more time the user/consumer spends in their stores/on their online platforms, the better it is for them. But if you look at it from the user/consumer standpoint, the quantum of choices often are overwhelming, leading to decreased happiness, decreased satisfaction and decision paralysis.

I remember the time when I bought my first pair of denims. All I had to worry about was the fitting; colour, material or finish of the product was least of my concern. Now, I dread even venturing into a store or even looking it up online, as I am inundated with the barrage of options — fitting is the least of my worry. There is a reason behind this phenomenon.

“Autonomy and Freedom of choice are critical to our well being, and choice is critical to freedom and autonomy.”

Barry Schwartz, The Paradox of Choice.

Yes, freedom of choice and autonomy are critical, but with a caveat (choices=meaningful choices). Schwartz further describes the negative effect on an individual’s psyche. Although, he talks about Americans but I couldn’t agree more, as it is more of a global phenomena.

“Americans have more choice than any group of people ever has before, and thus, presumably, more freedom and autonomy, we don’t seem to be benefiting from it psychologically.”

Through this essay, I attempt to build some context on the interplay of choice and decision-making by way of anecdotes and frameworks/models. Let’s begin with understanding how we arrive at decisions (aka the decision model).

Decision Model — Reducing decision fatigue

What is a decision? It is a choice between a number of different options, each of which lead to some expected outcome. And choice is defined as the act of picking between two or more possibilities. At every stage in life, we encounter multiple choices — some are mundane and some are life altering. Each individual has different ideas about what is important and making your own choices is very empowering for a group of individuals.

Decision-making can be hard. The number of decisions we need to make everyday can be overwhelming. Research shows that the more decisions we make in a given day, the worse we get at decision-making (aka decision fatigue.) Even with using all the data we have at your disposal, it is difficult to decide in the midst of this fatigue.

As a start, there is one plausible way and that is visualising a decision using a Decision Model — it is essentially flow charts. They help you capture all the information which is needed in order to make an optimal decision. The following is a base level decision model:

  1. Enumeration/evaluation of all possible choices
  2. Understanding of the result of each choice
  3. Understanding of the eventual outcomes

The above is helpful in building some conviction on the plausible outcome — it helps individuals in the priming process. Decisions like buying a car, accepting a job or planning for your retirement are some of the instances where the decision model comes in handy.

What happens in a scenario where you are sitting on the other side of the table? And through your actions can influence the decision-making process. This is where frameworks such as “Choice Architecture” is finding a lot of favour.

Choice Architecture — The good and the bad

In the past decade or so, “Choice Architecture” as a framework has been gaining a lot of traction, from nudging people into retirement savings to the Brexit vote — it is everywhere. The idea originated in a book, “Nudge: Improving Decisions about Health, Wealth, and Happiness” by Nobel laureate Richard Thaler and Cass Sunstein.

Choice architecture is a method to retain consumer sovereignty (the right to choose) but nudging consumers to make certain choices. How does it work? When consumers purchase goods, they are often influenced by factors such as:

  1. Default choice — Consumers buy the ‘easiest’ option. Often this is the option that they have used to buying. The default choice involves minimising costs of choosing and deciding what to buy.
  2. Short-term benefit. Consumers are more likely to be myopic — and choose based on short-term influences.

Choice architecture was one of the idea on which the Brexit referendum was structured upon. In 2010, then UK Prime Minister David Cameron set up the Behavioural Insights Team (aka Nudge Unit), in an effort to incorporate its insights into government policy. Prime Minister Cameron’s confidence in calling the referendum was in part based on the assumption that the populace would choose to remain in the EU due to factors like loss aversion and the status quo bias. Thaler explained at the time:

“I am not a prognosticator (foreteller), but I would bet on them staying. And I think that there is a tendency, when push comes to shove, to stick with the status quo.”

All is not bad in the world of choice architecture. There are ways and means by which brands and businesses nudge users/consumer towards more meaningful choices or reducing decision fatigue. The big friendly button labelled “I’m Feeling Lucky” on the Google home page intended to give us one result for our searches instead of drowning us in links. “Based on your watchlist” or “You may also like” are nudges meant for providing meaningful choices.

If you look into the responses in the realm of the current pandemic, you will find that it has a lot of nudges built-in. The act of washing hands, maintaining social distance, wearing masks are some of the examples of how simple nudges can help in reducing the rate of infection. These were structured around the individual behaviour and needed minimal changes in their day to day life. In the absence of any proven vaccine or therapeutics, the default option defined the reduction in infection rates and easing of lockdowns.

Role of choice in business

The impact of business decisions sometimes can have a detrimental impact on the environment and society at large. With more and more businesses getting evaluated on the impact they have on the environment, not caring for the environment is not an option anymore. Let’s look at the case of plastic straws and its (disastrous) impact on the environment.

There has indeed been some progress on this front by the way of changing the default option of not offering a straw while you buy a drink (providing on request) or offering paper straws. This had some impact, but the larger population still prefer using straws, which end up in landfills. Paper straws are made of PLA (polylactic acid), derived from renewable materials like corn starch or sugar cane. The challenge is that they only compost in industrial facilities, which aren’t available everywhere. And restaurants can’t hand out a metal straw with hot beverages.

Now, if you are running a restaurant which has beverages as one of the core product, consumption of straws is almost given. Secondly, with the added emphasis on sustainability and circular economy, what choice do you have in such a scenario?

Credit: Forbes | Organic Waste Systems (OWS), based in Belgium, conducted a home compostable study, concluding that … [+] the phade straw completely deteriorates in nine weeks. It’s pictured here at the start of the study (left) and at four weeks (right)

Dunkin (erstwhile Dunkin’ Donuts) is testing a new biodegradable drinking straw, called a phade straw, in selected stores in the US. The plant-based straw made with a substrate derived from canola oil, aka PHA or polyhydroxyalkanoate, will biodegrade anywhere. It has been created keeping in mind that “people are too lazy to compost.”

To sum up, the interplay of choice and decision-making is an interesting subject due to its dynamic nature. I would end the essay with a statement which I came across on my LinkedIn feed.

“When there’s one option, it’s a choice. When there are multiple options, it’s a dilemma.”

The meat is in solving for this dilemma rather than creating more choices. What do you think? Would love to hear your thoughts.

Until next time!

~ Sajid

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Business & Behavioural Design Strategy | Expertise in Design Thinking, Consumer insights & Business Model Design | Founder at Le Monturé Strategy