We have so many choices these days, and so little time to make a choice. From the choice of the right breakfast cereal to the choice of the right health insurance, we are trapped in an endless spiral of everyday choices.
Last night, I watched a TEDGlobal talk by Sheena Iyengar, a Professor of Business at Columbia Business School, about her research on “choice”. Yes, choice, or choices – depending on how you interpret modern dilemmas. It’s a really insightful talk about the gullible nature of choices:
The [second] assumption which informs the American view of choice goes something like this. The more choices you have, the more likely you are to make the best choice. So bring it on Walmart with 100,000 different products, Amazon with 27 million books and Match.com with — what is it? — 15 million date possibilities now. You will surely find the perfect match. Let’s test this assumption by heading over to Eastern Europe. Here, I interviewed people who were residents of formerly communist countries, who had all faced the challenge of transitioning to a more democratic and capitalistic society. One of the most interesting revelations came not from an answer to a question, but from a simple gesture of hospitality. When the participants arrived for their interview I offered them a set of drinks, Coke, Diet Coke, Sprite — seven, to be exact.
During the very first session, which was run in Russia, one of the participants made a comment that really caught me off guard. “Oh, but it doesn’t matter. It’s all just soda. That’s just one choice.” (Murmuring) I was so struck by this comment that from then on I started to offer all the participants those seven sodas. And I asked them, “How many choices are these?” Again and again, they perceived these seven different sodas, not as seven choices, but as one choice: soda or no soda. When I put out juice and water in addition to these seven sodas, now they perceived it as only three choices — juice, water and soda. Compare this to the die-hard devotion of many Americans, not just to a particular flavor of soda, but to a particular brand. You know, research shows repeatedly that we can’t actually tell the difference between Coke and Pepsi.
…In reality, many choices are between things that are not that much different.
While this phenomenon may be cultural, some of it also has to do with the notion of individualism in many societies. “We are what we choose”, remarked Jeff Bezos in his speech to the Class of 2010 at Princeton University. But thinking too hard can often lead to poor choices.
What if most, if not all, of the choices could be simplified with something simple — a default option.
A default option, provisioned through careful analysis, can have an immense impact on us, specially in the social and economic landscape. What if the default option for the delivery of your utility bills or bank statements is email instead of paper mail? What if the default option for the enrollent in a retirement plan is inclusive instead of exclusive? What if a school cafeteria displayed the healthiest foods at the front? What if a $1 donation is a pre-selected option in a magazine renewal form? The simplest way to get more organ donors is to make the system “opt-out” instead of “opt-in”. People use the default choice most of the time, since they believe it is default for a reason.
Changing the defaults can be a powerful incentive to changing behavior. Having said that, choosing a good default is equally important. A wrong default for an array of choices can be counter-productive. Facebook’s privacy settings are a good example of poor defaults.
In the book “Nudge: Improving Decisions About Health, Wealth, and Happiness”, Prof. Cass Sunstein and Richard Thaler talk about the science of choices and defaults:
The human brain is amazing, but it evolved for specific purposes, such as avoiding predators and finding food. Those purposes do not include choosing good credit card plans, reducing harmful pollution, avoiding fatty foods, and planning for a decade or so from now. Fortunately, a few nudges can help a lot.
In present day and time, we often forget that when we have to make a choice and don’t make it, that is in itself a choice.