Satisfaction in Choice as a Function of the Number of Alternatives: When Goods Satiate But Bads Escalate

44 Pages Posted: 19 Jul 2007

See all articles by Elena Reutskaja

Elena Reutskaja

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences

Robin M. Hogarth

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences

Date Written: November 2005

Abstract

Whereas people are typically thought to be better off with more choices, studies show that they often prefer to choose from small as opposed to large sets of alternatives. We propose that satisfaction from choice is an inverted U-shaped function of the number of alternatives. This proposition is derived theoretically by considering the benefits and costs of different numbers of alternatives and is supported by four experimental studies. We also manipulate the perceptual costs of information processing and demonstrate how this affects the resulting "satisfaction function." We further indicate that satisfaction when choosing from a given set is diminished if people are made aware of the existence of other choice sets. The role of individual differences in satisfaction from choice is documented by noting effects due to gender and culture. We conclude by emphasizing the need to have an explicit rationale for knowing how much choice is "enough."

Keywords: Consumer choice, perception of variety, tyranny of choice, visual perception, cultural differences, Leex

JEL Classification: D12, M10, M31

Suggested Citation

Reutskaja, Elena and Hogarth, Robin M., Satisfaction in Choice as a Function of the Number of Alternatives: When Goods Satiate But Bads Escalate (November 2005). Available at SSRN: https://ssrn.com/abstract=1001648 or http://dx.doi.org/10.2139/ssrn.1001648

Elena Reutskaja (Contact Author)

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain

Robin M. Hogarth

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain
34 93 542 2561 (Phone)
34 93 542 1746 (Fax)

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