Too Many Choices?

Over at Steve Landsburg’s blog (The Armchair Economist), he has a post about the wide variety of Toothpaste at the grocery store and the inherent difficulty in choosing as the options increase. 

Mark Skousen is quoted in Landsburg’s post:

In my econ classes and in my “Economic Logic” textbook, I talk or write about how great capitalism is, and how over time it increases the Quantity, Quality and Variety of goods and services. I call it the Q, Q, and V principle. I follow up with assignments to the students on making lists of new products that have recently developed, or old products that are now obsolete, or assigning students to count how many different kinds of bread there are in a local grocery store or types of beer in a liquor store.

[But] now [after shopping for toothpaste] I’m having second doubts when it comes to variety. It’s too confusing. I’m starting to think there are too many choices, which can reduce consumer satisfaction.

What do you think: Do too many choices paralyze the consumer, increase decision-making time (cost), and leave them worse off? Or do more choices always mean the consumer is better off?

Advertisements

One thought on “Too Many Choices?

  1. Remember the idea of opportunity cost and information costs; people only spend time differentiating between products if they would gain more utility from it than doing what they would otherwise be doing with that time.

    Toothpaste is such a low part of my income that I simply grab whatever looks the best after looking at the rack for 5 seconds. I suspect most consumers behave similarly. Remember brand loyalty though; people might be swayed by a single ad to always pick Colgate because actually figuring out what is best by themselves isn’t worth the costs of doing so.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s