PDF Summary:The Paradox of Choice, by Barry Schwartz

In The Paradox of Choice, Barry Schwartz contends that the vast array of choices presented to us leaves us stressed and indecisive. To lift this burden, Schwartz, a professor of social theory and social action, recommends we learn how to better navigate our choices, from groceries to health insurance.

Schwartz’s work combines psychology, economics, and his personal experiences. In this guide, we’ll examine the types of choices we face, the challenges of making choices, how excessive choices make these challenges more difficult, and how to live with expanded choice. Our guide adds scientific and cultural context to Schwartz’s ideas, plus updates on how choice has grown since the book’s publication.

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1. Availability Heuristic: This describes how we give greater weight to information we can easily recall. Because of this, we often make decisions based on our most vivid memories, rather than accurate information.
2. Anchoring and Framing: These are two biases that can lead us to make faulty comparisons among options. Anchoring is using other items as reference points for comparisons, while framing is using language to manipulate how people choose among options.
3. Prospect Theory: This describes how people choose among uncertain or risky options and the role that bias plays. One element of prospect theory is the psychological effects of gains and losses. As you make gains, you’ll probably feel good, but as you make more gains, the satisfaction shrinks. Likewise, when you incur a loss, you’ll likely feel bad, but when your losses increase, your dissatisfaction might not increase too much. Additionally, we feel losses more strongly than gains, which makes us try to avoid losses. There is also an arbitrary “neutral point” that determines what will feel like a loss or a gain: anything better than the “neutral point” will feel like a gain, while anything worse than the “neutral point” is a loss. This neutral point can be anything, and it’s often manipulated by anchoring and framing.
4. Endowment Effect: Once you have something, you feel that it’s yours, or you “own” it. This applies even if something’s only been in your possession for a brief time.
5. Sunk Costs: This is money you’ve already spent and can’t recover. Many of us prioritize avoiding sunk costs over what we actually want to do (for example, seeing a concert we don’t want to see because we already purchased tickets).

How Reliable Is Our Memory?

While it’s true that our memories can be biased and skewed, scientists have had difficulty determining the extent of our memory’s reliability or unreliability. For example, Scientific American described a recent study showing that people’s memories were much more accurate than anticipated: When recalling events that happened two days ago, a study group described them with 90% accuracy, much higher than the 40% that the researchers predicted.

Other studies have shown that, while memories tend to be strong soon after events occur, they diminish over time. Researchers are still studying how memory works, and how well, but understanding the likelihood that our memory can be strong in the immediate aftermath of an event and weaken over time can be helpful in decision-making.

For example, if you take a trip and are trying to decide whether to return next year, you might decide to write down your thoughts immediately after the trip. Even if remembered utility biases you to consider your feelings at the end of the trip, you’ll still probably have a sharp memory of what happened at the beginning and middle.

Maximizing and Satisficing

Because of the difficulties of expanded choice and cognitive biases, Schwartz notes that many people fall into a particular bad habit to save energy and effort: making most choices indiscriminately, without considering options or consequences. These people are “guessers.” In contrast, those who think through their decisions are “deliberators.”

Schwartz notes two kinds of deliberators:

1. Maximizers accept only the best possible option.
2. Satisficers accept an option that, though not perfect, meets their standards.

(Shortform note: The terms “maximizing” and “satisficing” were coined in 1956 by economist and psychologist Herbert A. Simon, in the article “Rational Choice and the Structure of the Environment.” Simon argued that people are generally incapable of selecting the single best option from a wide range, but are in fact able to choose an acceptable option that will satisfy their needs.)

Maximizing and satisficing both come from a desire to make good decisions, but Schwartz argues that maximizing causes stress and eats up time much more than satisficing. If you maximize, you need assurance that every decision you make is the best you could have made. Because of this, maximizers aspire to consider every option they can, even for small decisions.

Satisficers, on the other hand, consider their options and have high standards, but once they find an option that meets those standards, they accept it rather than continuing to explore options.

Schwartz believes that, while maximizers think they’re prioritizing their best interests, they’re actually making themselves unhappy. Satisficers are the people who actually make the most of their decisions.

Are Maximizers Actually Unhappy?

Some research on maximizing counters Schwartz’s belief that maximizing and unhappiness are correlated, instead suggesting that there’s no meaningful connection between them.

Schwartz and other researchers use a metric called the Maximization Scale to determine whether people are maximizers or satisficers. However, a 2008 study contends that this scale is flawed, as it asks respondents questions that may not be directly correlated to maximizing (for example, whether they like to rank movies). The researchers created a narrower scale to measure maximizing tendencies, and they found that, though maximizers are still more likely to feel regret, they’re just as happy as satisficers.

How Choice Affects Happiness

Schwartz argues that the best way to find satisfaction in decision-making is to balance our freedom of choice with self-imposed restrictions. The most important of these is restricting our relationships to a few close ones. When we invest in close relationships, we limit our options, assume responsibility for others, and compromise. This puts some restrictions on our freedom of choice, yet evidence shows that people with strong relationships are happiest.

Prioritizing Decisions

In addition to narrowing our freedom of choice by engaging in close relationships, Schwartz recommends deciding which choices to spend time on, and which to make without much deliberation.

Schwartz cites the work of Cass Sunstein and Edna Ullmann-Margalit, who described decisions we shouldn’t have to think much about, and can therefore automate, as second-order decisions. They identify four categories of second-order decisions:

1. Rules: By making rules for ourselves about certain choices (for example, that you always stop at stop signs), you can reduce the number of choices in your life.
2. Presumptions: Like rules, presumptions are predetermined choices you make for yourself. However, you can change presumptions if your circumstances change. For example, if you start work each day at 9 a.m., you might set your alarm for 7 a.m. daily. Your presumption is to wake up at 7 each day. However, if you have an 8 a.m. doctor’s appointment, you might set your alarm for earlier.
3. Standards: Standards are more flexible than rules or presumptions, but they still confine your choices. To set standards means to sort your options into two categories: acceptable and unacceptable.
4. Routines: We build routines when we find something that meets our standards (for example, we buy the same latte at the same coffee shop every day).

Second-Order Decisions and the Legal System

Schwartz focuses on individualized second-order decisions, like picking a morning routine or setting standards to make everyday decisions easier. However, second-order (automated) decisions may also encompass higher-stakes decisions, such as those involving the legal system.

In a 1999 paper, Sunstein and Ullmann-Margalit wrote that institutions and the legal system use second-order decisions as often as average people do. As examples, the researchers cited legal authorities enforcing speed limit laws (which fall under rules), or government agencies setting limits on energy use for corporations, which can be appealed if necessary (an example of presumptions).

Schwartz’s view on second-order decisions is more casual and low-stakes, since he’s only discussing them in terms of individuals. However, it is important to note that all decisions have consequences, and you should be able to revisit and reconsider second-order decisions if you think they could have a negative impact.

Pitfalls of Too Much Choice

In addition to exacerbating the difficulty of making choices, Schwartz asserts that expanded choice comes with four distinct pitfalls: missed opportunities, regret, disappointment, and unfavorable comparison.

Missed Opportunities

Opportunity costs always come into play when we make a choice: When we settle on one option, we forgo the potential benefits of the other options. While it is important to consider the pros and cons of your options when making a deliberate choice, obsessing over opportunity costs can make you dissatisfied with the choice you do make.

People who stress over opportunity costs might be dissatisfied in the end because they worry that they haven’t made the objectively correct decision, or that there could have been a perfect option they haven’t considered. Schwartz argues, however, that opportunity costs are entirely subjective. There is no objectively correct decision, just the right decision for the chooser.

(Shortform note: Many decisions do have objectively positive or negative outcomes—for instance, if you choose to save money by eliminating doctor visits, you’ll end up with poor health. While Schwartz’s argument is salient in that we make many decisions based on feelings, which we can overemphasize, it’s important to be more aware of objective outcomes when making choices in areas like health and finances.)

Regret

Expanded choice can lead us to regret our choices. Schwartz notes three factors that cause regret:

1. Omission bias: When reflecting on the recent past, we regret choices we made instead of those we failed to make. The opposite is also true: When reflecting on the distant past, we tend to regret choices we failed to make instead of those we made.
2. Nearness effect: If a choice nearly works out, we feel bad that it didn’t.
3. Responsibility: We only regret choices we feel personally responsible for.

Maximizing and Regret

Studies have shown that regret is one of the key negative impacts of maximizing. One study even suggested that quality of life for maximizers is affected only when the maximizer feels regret.

Because maximizers don’t have consistent standards, and instead constantly consider what better options there are, they have the potential to regret any decision that they make. Thus maximizers can feel regret constantly. This can have many negative effects on quality of life, because significant regret can harm mental health, making you feel anxious, depressed, and dissatisfied.

Therefore, learning to be a satisficer, can lessen regret and improve life satisfaction. If you’re a maximizer and struggle with decision regret, try taking steps to satisfice, like setting standards, making firm decisions, and accepting options that are “good enough” instead of perfect.

To make matters worse, we’re able to imagine hypothetical scenarios, called counterfactuals, that prompt regret. For example, we imagine how past events might have gone differently, or what our lives would be like had we made different choices.

Schwartz identifies two kinds of counterfactuals: upward and downward. The kind that brings us regret are upward counterfactuals: We imagine how something in our life could be better, and regret that that’s not the case. Using downward counterfactuals, however, we imagine how things could be worse. Schwartz writes that downward counterfactuals have the potential to reduce regret, and that those who struggle with excessive regret could benefit by practicing them.

(Shortform note: A 2017 study showed a correlation between upward counterfactuals and depression. It’s unclear whether depression causes people to think of upward counterfactuals (how they could have been better off) or vice versa, but this data backs up Schwartz’s idea that frequent counterfactual thinking leads to unhappiness and regret.)

Expanded choice, and the maximizing tendency it encourages, amplifies regret over decisions. Aiming to choose only “the best” will create regret whenever a chosen option isn’t perfect, which is almost all of the time.

Disappointment

Schwartz explains that even when we make good choices, we often end up disappointed in the long run because of hedonic adaptation: When we get used to things that give us pleasure, they lose their novelty and we begin to take them for granted. To counteract this, many of us get caught on a “hedonic treadmill,” meaning that we constantly chase after pleasurable experiences.

The Link Between Shopping and Unhappiness

An example of the hedonic treadmill that most of us have experienced is the desire to buy more and more things. Buying a coveted item, or even a random product that piques your interest at the right moment, makes you feel good in the moment, yet hedonic adaptation usually kicks in pretty quickly. It can be easy to get trapped in a pattern of purchasing random products to get a regular little jolt of pleasure.

In an article in The Atlantic about how unfettered shopping can damage supply chains, Amanda Mull illustrates the futility of buying things to create happiness. The author comments that feeling bad makes people buy things to feel better. Yet studies have shown that accumulating material possessions makes you less happy. Shopping is just one example of how hopping on a hedonic treadmill can make you less satisfied.

Expanded choice makes our relationship to hedonic adaptation more difficult, because we have more opportunities to be disappointed by our choices. Our decisions are also more difficult and time-consuming when we have more options to choose from, meaning that our disappointment can be heightened when we don’t feel as good about a choice as we’d expect. If we spend a lot of time on a choice, we hope it will be satisfying, therefore it can feel depleting when we’re less happy than expected.

This problem is heightened for maximizers, since they put more weight on each of their decisions. Because maximizers strive to make perfect decisions, being dissatisfied with a decision will make them feel worse than a satisficer who is occasionally dissatisfied.

Comparison

Schwartz notes that one reason we may feel regret or disappointment in our choices is that we compare them with others’ choices to gauge whether we’re choosing well.

Social comparison—comparing ourselves to others—affects decision-making the most in market democracies, according to Schwartz. He notes that a motivating factor behind social comparison is the desire for status. Achieving status, however, is difficult in a society of expanded choice: Everyone has more ways to accrue status, so it’s harder to get ahead.

A complicating factor is that society encourages us to compete for scarce resources. Status motivates us to compare ourselves and our choices to others’, yet scarcity means we sometimes fall short, which makes this pursuit profoundly unsatisfying. While social comparison and the drive to accrue status cause challenges for everyone, Schwartz notes that, once again, maximizers suffer the most acutely because of their drive for the best.

(Shortform note: Social media is one area where social comparison is especially notable. Because people tend to post idealized images of themselves on social media, users make frequent upward comparisons. When subjected to a constant stream of images that cause upward social comparison, people may experience depression, lower self-esteem, and negative body image. These results are particularly strong for those who are pessimistic.)