Talk

Tyranny of Choice

The perils of living in a consumer paradise | csmonitor.com

Driving this malaise is the problem that "everything suffers from comparison." Schwartz describes a simple experiment in which people are asked whether they'd rather be given $100 outright, or gamble on winning $200 at the toss of a coin. That the vast majority would prefer the $100 may seem strange at first: A 50 percent chance of earning $200 is mathematically equivalent to a 100 percent chance of earning $100. Half the people asked ought to opt for the coin toss. However, the alternatives are not psychologically equivalent: Getting twice the money is not twice as pleasurable. The distance between zero and 100 is subjectively greater than the distance between 100 and 200. Economists capture this phenomenon in the law of diminishing marginal utility (and provide us the formulae to calculate that, psychologically, we'd need winnings of $240 to be equally tempted by the coin toss). How, though, does this asymmetry relate to real-life choices? If losses subjectively weigh more heavily than gains, the advantages of any chocolate chip cookie or career path we select will count for less than those of the options we pass up.