Multi-dimensional choices

Is there a paradox of choices?

Prepared by J. Scott Armstrong (details on him at jscottarmstrong.com). Please inform Scott about errors and also make suggestions (armstrong@wharton.upenn.edu) Scott has taken these slides from adprin.com, a site that he founded. That site contains interactive versions of these slides, along with linked references, videos, and webcasts, all in PPT and PPTX format that you can download.

Is there a paradox of choice? Evidence

No. A meta-analysis of 49 published and unpublished studies on the “too much choice effect” found that there is no general effect from the number of choices available (Scheibehenne, Greifeneder, and Todd 2010) For a short summary, click here.

Some choice is good for customers

That is obvious for consumers.

It is also good for sellers because having choices changes the question from “whether” to buy to “which” to buy.

Experts like having many choices

• Ever heard of a wine expert complain that a store offered too many wines?

• But non-experts feel overwhelmed.

How can you satisfy poorly informed customer who face many multi-dimensional choices?

___ 1. Offer one choice___ 2. Offer a few choices___ 3. Offer many choices___ 4. Offer many choices organized in uninformative categories.___ 5. Offer many choices in informative categories

See the next slide for the answer.

Findings

The best solution comes from organizing things for customers, so they were most satisfied by #4 and #5 (they scored almost the same)___ 4. Offer many choices organized in uninformative categories.___ 5. Offer many choices in informative categories.But #5 helps to educate the customer, so it is best.

Conditions for choices

When there are many substantive multi-dimensional options, organize them and provide guidance (1.3.3.)

(Mogilner, Rudnick & Iyengar 2008)

They should be organized into meaningful groups of about 7 to 10 choices, and guidance should be given to uninformed shoppers.For a further discussion, see (Persuasive Advertising, p 35-39)

and AdPrin.com

7

Adapted from AdPrin.com

Based on this exercise, write a small application step for yourself, and set a deadline, preferably within one week. If you are working with someone else, share your application plan and the results of your application.

• For example, organize the choices your firm offers more clearly so that they can be easily understood and ensure that lists for customer selections do not exceed 10 items.