In "Wharton on making decisions," Hoch and Kunreuther (2005) discuss how decision-making can be accompanied by systems which aid in choice. In review of the brick-and-mortar providers of choice, it is important to balance the joy of variety with the stress which develops from information overload.
Cut Out Options
Less is more. By cutting out extra options, the choosing experience improves. Iyengar notes that while people may marvel over a plethora of choices, they are less likely to choose if there are too many to choose from. When people do choose from too many options, they choose in ways that simplify their option, which may disregard the benefit of diversification. As an individual, I am a big thinker, and I often find myself wanting to "do it all" instead of weighing options and cutting choices. If I have the choice between making steak or salmon for dinner, and both are un-thawed, I plan to make surf-and-turf. My rationale is, "why wait?" At work, I am much the same way. I would rather try to make all event ideas happen instead of just one. I can admit that these kind of decisions often stretch me farther than I anticipate, particularly when I do not have the manpower. Learning to live by Matthew 6:27 is a goal: "Can any one of you by worrying add a single hour to your life?" Realizing that there are still only 24 hours in a day is far more challenging than it should be. Noting pros and cons to each decision would help to make the road to choose easier.
Concretization, or Concrete Decision-Making
Iyengar's third step discusses how people need to make options more concrete. This is done by seeing and feeling the effects of certain decisions, not just thinking about them abstractly. Abstract thoughts are open to generalizations, overestimating the profits of benefits or underestimating the risk, challenges and negative outcomes. As Iyengar discusses, "Why do people spend an average of 15 to 30 percent more when they use an ATM card or a credit card as opposed to cash? Because it doesn't feel like real money."
As an individual, I am much the same when it comes to money. In studying the financial wisdom of Dave Ramsey and Suzie Orman, I am learning to make my financial decisions more concrete. I collect and organize receipts from all of my expenditures so I can see how many transactions are made in a day and week. I have text messaging set so I can easily access the amount of money in my account. Though I am not to the point where I use envelopes to split my check into food money, insurance money, cell phone money, and otherwise (as Ramsey emphasizes), I have made it far more difficult to escape the ignorance of not knowing how much money I have or how much is spent (2009).
Utilize Categories
Reflecting on Iyengar's example in cutting options in terms of financial decisions, "the more choices available, the more likely people were to completely avoid stocks or equity funds. The more choices available, the more likely they were to put all their money in pure money market accounts." Stocks is a category in which people generalize as risky; within this one choice, it is the goal of investors to find stocks which are profitable, as they have already resolved that anything deemed a stock is risky.
Condition for Complexity
Conditioning for complexity involves making a decision from a grand list of choices - but doing so with pacing. Consumers want decisions, but are more likely to make them if the choices start small and increase over time, than starting large and minimizing options.
References
Hoch, S. J., & Kunreuther, H. C. (2005). Wharton on making decisions. (1st edition.). Hoboken, NJ: John Wiley & Sons Inc.
Ramsey, Dave. (2009). Dave Ramsey's Envelope System. daveramsey.com. Accessed at
http://www.daveramsey.com/article/dave-ramseys-envelope-system/lifeandmoney_budgeting/
Utilize Categories
Reflecting on Iyengar's example in cutting options in terms of financial decisions, "the more choices available, the more likely people were to completely avoid stocks or equity funds. The more choices available, the more likely they were to put all their money in pure money market accounts." Stocks is a category in which people generalize as risky; within this one choice, it is the goal of investors to find stocks which are profitable, as they have already resolved that anything deemed a stock is risky.
Condition for Complexity
Conditioning for complexity involves making a decision from a grand list of choices - but doing so with pacing. Consumers want decisions, but are more likely to make them if the choices start small and increase over time, than starting large and minimizing options.
References
Hoch, S. J., & Kunreuther, H. C. (2005). Wharton on making decisions. (1st edition.). Hoboken, NJ: John Wiley & Sons Inc.
Ramsey, Dave. (2009). Dave Ramsey's Envelope System. daveramsey.com. Accessed at
http://www.daveramsey.com/article/dave-ramseys-envelope-system/lifeandmoney_budgeting/
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