Satisfaction in choice as a function of the number of alternatives: When "goods satiate" but "bads escalate"
AbstractWhereas 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.”
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Bibliographic InfoPaper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 903.
Date of creation: Nov 2005
Date of revision: May 2006
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Web page: http://www.econ.upf.edu/
Consumer choice; perception of variety; tyranny of choice; visual perception; cultural differences; Leex;
Find related papers by JEL classification:
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- M10 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - General
- M31 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Marketing
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-12-09 (All new papers)
- NEP-CBE-2005-12-09 (Cognitive & Behavioural Economics)
- NEP-DCM-2005-12-09 (Discrete Choice Models)
- NEP-MKT-2005-12-09 (Marketing)
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