Do you ever feel like life presents an awful lot of choices as you grow older that, instead of making life simpler, make it difficult and almost unbearable? Well, you are not alone. This phenomenon is, in fact, a present-day crisis among many youths and adults. It is referred to as the Paradox of choice. A study from 2005 found out, that reducing choices can result in boosting your revenue ( https://doi.org/10.1016/j.jcps.2014.08.002 ).
The Paradox of choice asserts that while having multiple choices may disguise as having more freedom and clarity, making a decision is hard and exhausting. Yet this is the modern-day way of life. Daily we are forced to make important decisions, and daily we are unhappy with our choices. This pattern naturally necessitates hindsight bias, referred to as the ‘I-knew-it-all-along’ effect.
This article offers a concise analysis of these two phenomena alongside a detailed description of how connected they are.
The Paradox of Choice Explained
Coined by Barry Schwartz in his book ‘The Paradox of Choice: Why More is Less,’ this occurrence asserts that having multiple options does not equate to a simpler life. We can draw an interesting inference from watching movies on sites like Netflix.
Do you ever go on Netflix without any particular show in mind and end up taking almost 30 minutes to find a movie to watch? Worse, if you are not alone, you end up feeling dissatisfied with your final choice, which greatly diminishes the quality of your consumer experience.
Effects of the Paradox of Choice on Consumer Behavior and Human Behavior
Consumer behavior is a subject of interest in multiple fields, including economics, organization behavior, marketing, and psychology. If you have innumerable options in life as a consumer, life will be more difficult for you, which is why it is important that you set clear goals in life and prioritize them.
Another highly critical phenomenon is human behavior. The world has taught us to be maximizers. This means you are naturally conditioned to maximize your use of money, leisure, or any other form of consumption. Schwartz, however, insists on a different approach to life – satisficers.
Satisficers make decisions once their prior defined criteria are met. Satisficing is thus believed to be an effective remedy to the Paradox of choice given the stated approach.
The Hindsight Bias Explained
Have you ever had an event happen to you in a recent past ad gotten that familiar feeling of ‘you saw it coming? This behavior is referred to as hindsight bias. You look back at a wildly unpredictable occurrence of an event in your past, e.g., a break-up, and become intensely convinced that you could have easily predicted it.
Hindsight Bias with the Paradox of Choice
Hindsight bias relates to the Paradox of Choice because it can negatively influence your decision-making process. One way you grow and learn to make wise decisions is by acknowledging your past mistakes. Hindsight bias gives a false impression of confidence over your ability to predict the future resulting in skewed decisions.
At any point in life, you are one decision away from facing dire consequences. We live in a fast-paced world with many options to pick from. Knowing how to prioritize your goals would help eliminate the complexities of the Paradox of choice. Unlearning hindsight bias makes you rational in all your decisions resulting in sound choices or decisions in the future.