What to start this blog with?
I’m an OCD type: after skimming the current week’s Economist, I put it in a pile of magazines (stacked chronologically) to revisit in my spare time. Which means I’m finally getting to the double-edition put out at year’s end. As one would expect, there are a number of gems in this issue. One of the highlights was a much-forwarded article on the futility of going for a PhD (popular in the academic circles). Of course the issue also had an article on the history of the modern suit…
Still, I was struck by the insight of ‘You Choose’. In it the authors examine how the increasing amount of choice has come to paralyze our decision-making abilities, decreasing sales, increasing frustration, and fueling a whole new branch of self-help.
On first glance, more choice seems like more money: diminishing returns, but always better. Try finding a vegetarian-friendly restaurant in a small town or watching a good sitcom during the summer. Indeed, in an age where inequality seems a product of limited options available to the disadvantaged we are indoctrinated with the power of choice.
But it’s not always so. ‘You Choose’ makes good use of available marketing studies as cautionary tales. A California grocery chain found that customers were 10 times more likely to purchase jam after a taste test if there were only six flavors as opposed to 24. This despite the fact that more shoppers stopped by with more flavors. Head & Shoulders saw a 10% uptick in sales when it downsized from 26 to 15 varieties of shampoo.
The article quotes very-informed sounding individuals who point out that greater choice means a greater chance of finding the perfect choice, and our frustration at failing to find said perfect choice rises as we waste more time searching. As an undergrad I experienced this same feeling searching through an exhaustive course directory looking for an elective; and then again when it came time to purchase my first car (Scion tC, no regrets on that front).
When reading this argument I was struck by a particular predicament I find myself in. As a graduating doctoral student I am faced with a plethora of choices right now: which companies to apply for a job, which city do I want to live in, is my girlfriend ‘the one’?
This last point may sound unrelated, but recently I heard the analysis that when to marry is at its basic an economics question: is my mate better than what I’m likely to find if I continue to look, discounting the time? In other words, consider finding a spouse like picking a dollar bill from a hat. The denomination of bills in that hat ranges from $1 to $100, and the proportion of each bill is inverse to its value. If you pull a $20 are you likely to throw it back and keep picking? Of course you are if you know there’s only a few more $20s than $50s. But what if you know that for every five $20s there’s but a single $50 but 100 $1s?
Thus, in a world where we are connected to an ever-wider group of people of ever-more diverse backgrounds and personalities, our choice for spouse is almost exponentially greater than the previous generation (and mind-boggling greater than their parents’). Similarly, the author hypothesizes that modern women have greater choice on when to have children and feel ever more stressed about having a family.
Am I arguing against choice because of my own indecisiveness (and stereotypical fear of lost youth)? No. More choice means a wider availability of niches, supporting more individualized tastes. Amazon makes more money off all the books in its “long tail” then on the few blockbusters that Dan Brown produces. More choice means more competition from businesses, driving down prices and increasing the pressure for innovation. Of course, being a newly minted PhD, the current plethora of choice in the labor market means fewer offers and lower pay!
Media type: Magazine Article
From: The Economist – Dec 16 2010
Title: ‘You Choose’
See it at: http://tinyurl.com/6bwcx9e