Choice Overload, What Is It And How To Avoid It

Choice overload is a kind of bias in human behaviour that affects our decision making, like all heuristics and biases do.

Understanding why biased behaviour happens can help you minimise the effect on your decision making, and thus make better decisions.

What is choice overload

These days we are blessed with an abundance of options.

But with it comes the flip side of it, choice overload.

Choice overload is when we feel paralysed when faced with too many options to choose from and we become overwhelmed.

This can often lead to us choosing nothing, or putting off the decision making to another day.

You see, making decisions, comparing alternatives, it all takes mental energy and we have limited amount of it.

The more complex the decision (for example alternatives with many differences that need to be evaluated), the more energy it takes.

Proof is in the… jam jar

A study was conducted where a jam tasting station was set up at a supermarket.

On some days the station would have 6 different flavours of jam to try, on others there would be 24.

Testers would receive a voucher for discount of they decided to purchase.

30% of those who visited the station when there were 6 flavours came back to buy jam compared to 3% of those who tried a jam from the station when it had 24 options.

Inability to decide between so many options is believed to play a part in this big difference of people who came to purchase a product in the end.

Part of the choice overload is that you are likely to be less satisfied with your decision and regret it later.

This is because out of the abundance of choices, you believe there could be an even better suited option for you than the one you picked.

So you end up regretting your choice, or won’t make a decision at all. 

How to avoid choice overload

One suggested way to avoid choice overload is to window shop, or make experimental decisions.

This means that you browse your options and compare them without the pressure of having to commit to one option at the end of it.

A no pressure way of getting information on your options, and according to studies, it makes the decision experience more enjoyable.

Also, telling yourself before hand that your decision is final (or maybe setting a timeframe on when to re-evaluate the decision) might help against feeling regret after the decision is made and not second-guess it afterwards.

Choice overload and finances

Choice overload can be a big reason for indecision and inaction when it comes to financial matters.

Financial information can be complex, with a multitude of options available which all have many variables.

This can make comparing them time consuming and overwhelming.

Let’s take KiwiSaver for example.

There are so many providers that are similar, except for some minor details, and all these providers have different kinds of funds on offer, and you could allocate your KiwiSaver within those funds as you choose.

That is a lot to decide and research to find the perfect option for you!

In my own case I’m guilty of putting this off too.

I know I’m currently with a provider with relatively low fees (an important factor!) and I’m in a growth fund, which I know is a good fit for me.

But for a nearly a year I’ve been meaning to check out other options that are available to see if I could find a provider with even lower fees.

I just haven’t as I’ve been finding the thought of doing it overwhelming.

And this is even though Sorted.org.nz has a great KiwiSaver comparison tool on their website.

Still, hello choice overload!

You can read more about choice overload here.

Can you think of a decision that you kept putting off because the thought of it felt overwhelming? I would love to hear in the comments!