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Designing a sequential choice architecture to reduce choice overload

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  • Besedes, Tibor
  • Deck, Cary
  • Sarangi, Sudipta
  • Shor, Mikhael

Abstract

Previous studies have demonstrated that a multitude of options can lead to choice overload, reducing decision quality. Through controlled experiments, we examine sequential choice architectures that enable the choice set to remain large while potentially reducing the effect of choice overload. A specific tournament-style architecture achieves this goal. An alternate architecture in which subjects compare each subset of options to the most preferred option encountered thus far fails to improve performance due to the status quo bias. Subject preferences over different choice architectures are negatively correlated with performance, suggesting that providing choice over architectures might reduce the quality of decisions.

Suggested Citation

  • Besedes, Tibor & Deck, Cary & Sarangi, Sudipta & Shor, Mikhael, 2012. "Designing a sequential choice architecture to reduce choice overload," MPRA Paper 38173, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:38173
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    References listed on IDEAS

    as
    1. Schram, Arthur & Sonnemans, Joep, 2011. "How individuals choose health insurance: An experimental analysis," European Economic Review, Elsevier, vol. 55(6), pages 799-819, August.
    2. Tibor Besedeš & Cary Deck & Sudipta Sarangi & Mikhael Shor, 2012. "Age Effects and Heuristics in Decision Making," The Review of Economics and Statistics, MIT Press, vol. 94(2), pages 580-595, May.
    3. Daniel Kahneman & Jack L. Knetsch & Richard H. Thaler, 1991. "Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 193-206, Winter.
    4. Julie Agnew & Pierluigi Balduzzi & Annika Sundén, 2003. "Portfolio Choice and Trading in a Large 401(k) Plan," American Economic Review, American Economic Association, vol. 93(1), pages 193-215, March.
    5. Todd Eric Roswarski & Michael D. Murray, 2006. "Supervision of Students May Protect Academic Physicians from Cognitive Bias: A Study of Decision Making and Multiple Treatment Alternatives in Medicine," Medical Decision Making, , vol. 26(2), pages 154-161, March.
    6. repec:cup:judgdm:v:4:y:2009:i:1:p:92-101 is not listed on IDEAS
    7. Betty E. Tanius & Stacey Wood & Yaniv Hanoch & Thomas Rice, 2009. "Aging and choice: Applications to Medicare Part D," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 4(1), pages 92-101, February.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    choice architecture; choice overload; status quo bias; self-sorting; decision making; experiments;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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