5 May, 2008
The Paradox of choice
Posted by bhavin.t
I just saw a profound video (a TED Talk) by Barry Schwartz on The Paradox of Choice. Barry is an author of a book by the same name. The video is short and covers basic logical reasoning on how more choice can actually be detrimental to our welfare. His arguments are mostly compelling (with a few areas I may not necessarily agree with). The macro fundamentals however are something I can relate to.
As a part of running Directi, I have learnt this paradox the hard way. While there exist several anecdotes, one that comes to mind is ResellerClub’s (one of our many businesses) our strategy of selling hosting packages. I remember not too long ago, when Rclub used to offer a complicated configurator for purchasing hosting packages. While other companies had a set of fixed packages, we offered our customers the ability to choose each parameter on their own. One could select the exact amount of disk space, email accounts, bandwidth, number of databases, database space and so on. If memory serves me right each parameter had between 2 to 15 combinations totalling up to possibly well over half a million combinations.
RClub has since sacrificed that system in favor of a simpler set of 4 packages, but not until we went through some of the thought process expounded by Barry in his talk.In summary, excessive choice can -
- Overwhelm a consumer
- Confuse a consumer - especially in a scenario where the customer does not know all the variables
- cause Paralysis - inability to decide which way to go
- result in Procrastination - where one chooses to postponing the choice due to their inability to make one
- manifest Regret - should I have picked the other one?
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