Choice Overload: When Knowledge Is Demotivating
People generally consider ‘more choice’ to be appealing but as you may have found out for yourself, more choice can lead to confusion and diminish decision making ability.
Studies have found that the presentation of choice can lead to adverse consequences such as decision maker demotivation, decrease in satisfaction and willingness to act.
A study recently published in the journal of psychological science aimed to examine this effect in relation to knowledge.
We propose that the effect of the number of choice options on willingness to purchase is moderated by people’s subjective knowledge (SK).
The researchers highlighted the importance of research into choice and decision making as if an arbitrary decision-bias exists this could have detrimental effects in many areas of important decision making. (Hadar & Sood, 2014)
The researchers gave the real life example of participation rates in retirement saving plans fall as the number of options increases, demonstrating the significance of choice-overload in peoples lives.
It is also significant in areas such as policymakers, marketers, and financial advisors as to how many choice options to offer decision makers.
The researchers predicted that:
People who had high subjective knowledge in a given domain (high-SK people) would be less likely to purchase from large choice sets than from small choice sets
That is to say that people who rated themselves as having high knowledge in a particular area would be less likely to buy given the option of a large choice.
The researchers also predicted that:
People who had low subjective knowledge in a given domain (low-SK people) would be more likely to purchase from large choice sets than from small choice sets
The researchers carried out several experiments in order to establish a connection between knowledge and choice and were able to draw several conclusions:
low-SK people are more willing to purchase when choosing from a large set of options than when choosing from a small set of options
Meaning that individuals who perceived they had little knowledge were more willing to purchase when met with a large choice, consistent with the idea of ‘more is better’.
While individuals who perceived they had a high level of knowledge were less willing to purchase when met with a large selection to choose from:
high-SK people are less willing to purchase when choosing from a large set of options than when choosing from a small set of options
This finding was consistent with previous evidence of showing choice overload.
The study concluded by suggesting the following:
more options should be provided in domains in which people often feel ignorant (e.g., wine), whereas fewer options should be offered in domains in which people tend to feel knowledgeable (e.g., soft drinks).