When More Alternatives Lead to Less Choice
AbstractThis paper shows that when the alternatives offered to consumers span the preference space (as it would be chosen by a firm), search or evaluation costs may lead consumers not to search and not to choose if too many or too few alternatives are offered. If too many alternatives are offered, then the consumer may have to engage in many searches or evaluations to find a satisfactory fit. This may be too costly and result in the consumer avoiding making a choice altogether. If too few alternatives are offered, then the consumer may not search or choose, fearing that an acceptable choice is unlikely. These two forces result in the existence of a finite optimal number of alternatives that maximizes the probability of choice.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by INFORMS in its journal Marketing Science.
Volume (Year): 29 (2010)
Issue (Month): 3 (05-06)
product line; choice; search; information overload;
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Richards, Timothy J. & Hamilton, Stephen F., 2011. "Variety and Cost Pass-Through among Supermarket Retailers," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114815, European Association of Agricultural Economists.
- Jason T. Abaluck & Jonathan Gruber, 2009. "Choice Inconsistencies Among the Elderly: Evidence from Plan Choice in the Medicare Part D Program," NBER Working Papers 14759, National Bureau of Economic Research, Inc.
- Caplin, Andrew & Dean, Mark, 2011. "Search, choice, and revealed preference," Theoretical Economics, Econometric Society, vol. 6(1), January.
- Fudenberg, Drew, 2006. "Advancing Beyond "Advances in Behavioral Economics"," Scholarly Articles 3208222, Harvard University Department of Economics.
- Chris M. Wilson & Luke Garrod & Alistair Munro, 2012.
"Default Effects, Transaction Costs, and Imperfect Information,"
GRIPS Discussion Papers
12-16, National Graduate Institute for Policy Studies.
- Wilson, Chris M. & Garrod, Luke & Munro, Alistair, 2013. "Default effects, transaction costs, and imperfect information," Economics Letters, Elsevier, vol. 119(2), pages 213-215.
- Amit, Adi & Sagiv, Lilach, 2013. "The role of epistemic motivation in individuals’ response to decision complexity," Organizational Behavior and Human Decision Processes, Elsevier, vol. 121(1), pages 104-117.
- Simon P. Anderson & André De Palma, 2012. "Shouting to be Heard in Advertising," Working Papers hal-00742240, HAL.
- Elena Reutskaja & Rosemarie Nagel & Colin F. Camerer & Antonio Rangel, 2011. "Search Dynamics in Consumer Choice under Time Pressure: An Eye-Tracking Study," American Economic Review, American Economic Association, vol. 101(2), pages 900-926, April.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mirko Janc).
If references are entirely missing, you can add them using this form.