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Choice Paralysis – Which one to choose?

Choice Paralysis – Which one to choose?

A decision can be treated as over-complicated, with too many detailed options, so that a choice is never made, rather than try something and change if a major problem arises. A person might be seeking the optimal or “perfect” solution upfront, and fear making any decision which could lead to erroneous results, when on the way to a better solution.

Autonomy and Freedom of choice are critical to our well-being, and choice is critical to freedom and autonomy. Nonetheless, though modern 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. – The Paradox of Choice

Research shows that excess number of choices puts down our level of satisfaction and time taken to decide.
Even after selection something we feel we could have further analysed other choices and chosen a better one.
A classic supermarket study involving choice of exotic jams showed that although more shoppers were attracted by 24 varieties of jams in one stand, only 3% of them bought any of the jams displayed. On the other hand, 30% of the shoppers who stopped by the stand that offered only 6 varieties of jams bought some jams.
When we are presented with too many choices, we tend to buy less as we could not make a stubborn decision. More choices also leads to less satisfaction, because the expectation levels are raised.

Examples of Choice Paralysis

  1. Rise of Agile Development (iteratively develop, test and deploy the code) is coming more prevalent in Software Industry may be because of the longer cycles of traditional water-fall model development model (following a defined phases, sub-phases and steps and cycles to develop an entire system or phase, test and deploy as a whole).
  2. At our office, we have lot of information like – several mails, phone calls, meetings, intranet, reports, in person, and casual talks have to be analysed before taking a decision.
  3. How many of you have taken your kids to an ice-cream parlour, and how long did they took to choose?
  4. How much time do we take to purchase a shirt or pant or shoes in a retail store?
  5. Endless categories and sub categories of products and services to choose from
  6. Investing – information overload from media, internet etc., – tough to choose the best insurance policy or picking a good stock, or mutual fund. 

Overcoming choice paralysis

  1. The company should properly differentiate the list of choices, provide comparison charts between products, and as far as possible keep choices to the minimum so that customer is not confused and leaves without a transaction.
  2. Talk to an expert on the field to understand the list of choices available, and get to know which ones are almost similar with very little differentiation, because most of the time those little differences do not matter for an end user.
  3. Decide on a time by when you have to make a decision. The longer, more confusion to make a decision.
  4. For any complicated problem, break them into smaller pieces, as it may help you make quicker decisions.

My experience with Decision Paralysis

  1. I have a friend who keeps changing his cell phone model, at least twice a year. He always thinks the newer model on the market is better than the one he has. But, most of the time he does not use many features of the newer phone.
  2. Earlier during my investing days, I used to do a lot of reading before pinning down on a Mutual fund or a stock, and later I would also add more to them as I find newer MFs or Stocks recommended by analysts. It took some time for me to get out of this clustering of information from the media.

To read more on Behavioural Biases in Finance and Investing, read my eBook here:


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1 Comment

  1. balaji,

    did u coin the term ‘choice paralysis’ or does it exist? 

    i really liked some of the examples you gave. so easy to relate! 


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