When Do More Options Produce Worse Choice?

A major difference between economic and psychological analysis of choice concerns the effect of having more options. Economic theory postulates that more choices should result in better outcomes because there will be a better match between the goals of the decision maker and the selected product. However, much work in psychology and consumer research has questioned this assumption (e.g., Iyengar and Lepper, 2000; Reibstein, Youngblood, and Fromkin, 1975; Schwartz, 2004), suggesting that choice overload occurs. This theory suggests that people have difficulty making choices when presented with larger choice sets in comparison to smaller sets, with choice set being defined as the number of alternatives in a choice set. Several studies have found that consumers have poorer subjective feelings regarding their choices when presented with larger choice sets (for a different perspective, see Scheibehenne, Todd and Greifeneder, 2010). Chernev, Bockenholt and Goodman (2014) recently conducted a large meta-analysis on the existing literature on choice overload. They looked at four subjective measures of choice: satisfaction/confidence, regret, choice deferral, and switching likelihood. With 99 meta-analytic observations (N = 7,202), they document a significant effect of choice set size on these subjective outcomes across studies without controlling for moderating effects. Specifically, they find that increases in choice set size lead to a detriment in subjective experience of choice. Yet there is another, perhaps more important, question: Does adding options improve the quality of choice? While several studies have explored people’s ability to choose the correct choice under varying choice set sizes, they have not been subjected to a systematic assessment. In this paper, we look at if and when choice set size influences choice accuracy. While more options might increase accuracy by providing options that are closer to the preferences of the decision-maker, more options might make finding the better option more difficult, decreasing the quality of the chosen option.