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We all have dreams. Some are big, some
00:00:21
are small. We keep asking ourselves
00:00:23
questions like, "What will I achieve?
00:00:26
What will I leave behind? How will I
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leave a mark?"
00:00:31
When I was a kid, I used to dream of
00:00:32
becoming a pilot. It seemed like such an
00:00:34
exciting and important job. I knew I
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couldn't sprout wings, but with those
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mechanical wings, I was going to be able
00:00:39
to become one of those world explorers,
00:00:41
much like Christopher Columbus or those
00:00:43
guys who discovered that the world
00:00:45
really wasn't flat, but round.
00:00:48
In school, our teachers used to tell us
00:00:50
that you could grow up and do and be
00:00:52
whatever it is you want to be, as long
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as you put your mind and heart to it.
00:00:57
And why not?
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I woke up one morning, though, with this
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dawning realization that in order to be
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a pilot, I needed to do more than just
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put my mind and heart to it. I'd need to
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be able to put my eyes to it. I wasn't
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going to be able to do that if I was
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going blind.
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Growing up, I began to develop this
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awareness of how so many of our hopes,
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dreams, and expectations
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struggle constantly against our
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limitations.
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And the big challenge that we all have
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in life is in trying to figure out how
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to overcome those challenges. Which ones
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can we overcome?
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Sometimes we succeed, and sometimes we
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don't.
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Whenever we're different in some way
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from other people,
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people try to pretend like we're just
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like everybody else.
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Then or they write write you off.
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Sometimes they create a special niche
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for you, a role that you're supposed to
00:01:53
play.
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I I when I first landed in Spain, I was
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so confused because everywhere I went
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people would walk up to me on the street
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and start handing me money and expecting
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me to give them lottery tickets in
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return.
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When I went to Japan, everywhere I went
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random people kept coming up to me on
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the street and taking my hands and
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putting them on their necks and backs
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and expecting me to start performing
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these magical massages.
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When I was in high school, my guidance
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counselor assumed he didn't have to show
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me the college manual because after all
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I like most other blind people would
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probably end up on social security and
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SSI.
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Then again, there were those people who
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assumed, "Well, she's blind. She clearly
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must have talent." So they handed me a
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clarinet.
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Then when I proved to have absolutely no
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musical talent, they decided, "Well,
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okay. Well, maybe she could go to
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college, in which case the choice is
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obvious. She should be just become a
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lawyer."
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Every step of the way, people kept
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deciding what I could and couldn't do.
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And as a result, it became empowering
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for me to be able to separate the true
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limitations from the perceived ones.
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Well, somehow I ended up at the
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University of Pennsylvania for my
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undergrad at the Wharton School of
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Business. And there I was plagued with
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this all-consuming question, "What are
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you going to be when you grow up? And
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particularly, what could you be when you
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grew up?"
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I started to take all these different
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classes and I stumbled upon this course
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that
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would change my life.
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I was taking social psychology and
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consumer behavior and statistics at the
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same time while I was an undergrad in my
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sophomore year.
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And I thought to myself, "Hmm.
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Human behavior, let's try to discover
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what affects people's behavior, why they
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do all the things that they do. This
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sounds kind of cool.
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Maybe this is something I could do."
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And no one ever said that a blind person
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couldn't become an experimentalist. Then
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again, there weren't too many blind
00:03:47
experimentalists. In fact, there were no
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blind experimentalists running around.
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But the question
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became open.
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So I went to see a professor, John
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Sabini here at the University of
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Pennsylvania, and I asked him whether he
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would consider hiring me as a research
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assistant. I was a sophomore at the
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time.
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I remember asking him this question as
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to whether he'd hire me to do some
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experiments for him.
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I remember there was this long pause.
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Nothing was said at that moment. I
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started to ramble at him and assumed
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that he probably wasn't going to give me
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this opportunity. And suddenly he
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started to pound the desk and say, "I
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have it. You're it."
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He decided that he had an interesting
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role for me to try. He was doing an
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experiment on embarrassment and giving
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people negative feedback and how
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embarrassed they got.
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So he suddenly had this idea, "Well,
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what if you receive negative feedback
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from a blind person? Would you get just
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as embarrassed?"
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Well, for the record,
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the experiment actually didn't work out.
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But
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what happened at that moment
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was suddenly at that moment, my career
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as a researcher began.
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And unbeknownst to me, it was at that
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moment
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that I started to become interested in
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studying the role choice plays in our
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lives.
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You see, choice is the big idea, the
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tool we wield whenever we come up
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against our limitations.
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We believe that if we play our cards
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right, then we can choose our way to
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happiness.
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But although choice is a wonderful thing
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in our life, it's not the answer to
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everything.
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True,
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for me, choice made a big difference in
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my life. The ability to choose a career
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as a researcher
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was what enabled me to establish myself
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as being more capable than others gave
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me credit for.
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But I think I was able to take advantage
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of choice in this domain of my life
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because I understood my limitations.
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People just kept reminding me of them.
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I didn't have the choices of the
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sighted, but in a way,
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that made making a decision a lot
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easier.
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And because I didn't I because I had to
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constantly push past naysayers and
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doorkeepers every step of the way,
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anytime I wanted to pursue a choice, it
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had to be something that I was willing
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to dedicate myself to.
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I couldn't afford to choose on a whim.
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Over time, I started to develop this
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language of limitations.
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It became second nature to me.
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And you might think that sounds rather
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self-defeating. Most of us would rather
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think in terms of positives or emphasize
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the possibilities.
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But I think what I've learned through my
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personal experience and through nearly
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two decades of research
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is that we get a lot more out of choice
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in our lives if we understand that we
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don't always know how to choose.
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And that choice has its limitations.
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Let's take a basic assumption that we
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all have about choice.
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That we know what we want.
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We believe that we all know what we
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want. And as long as we get what we
00:07:02
want, we'll be happy. And of course, if
00:07:05
we have more choices, then we're more
00:07:06
likely to get what we want.
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And be even happier.
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But do we know what we want?
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And even if we knew what we want, are we
00:07:14
more likely to find it and choose better
00:07:17
if we had more rather than less?
00:07:21
Well, let's take this assumption at its
00:07:23
most basic level.
00:07:27
You see these two women.
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Can you tell me who you think is
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prettier? I'm told they're both quite
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beautiful.
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Peep students in New York and in many
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Scandinavian countries were shown just
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these two pictures.
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They were asked, "Which one do you think
00:07:43
is prettier? They were shown a whole set
00:07:45
of different pairs of women pic female
00:07:48
pictures.
00:07:49
And they indicated in each case which
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one they thought was prettier.
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Then, they were shown the same pictures
00:07:55
again and shown which one they thought
00:07:57
was prettier.
00:07:59
And asked, why did you pick that one?
00:08:03
In some cases, people clearly picked the
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brunette. In some cases, people picked
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the blonde.
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In either case, they were shown the one
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that they picked and were asked, why did
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you pick the one you picked?
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In some cases, though,
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unbeknownst to the subject, it was
00:08:18
switched on them.
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If they had chosen the brunette, they
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were shown the blonde.
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What did they do?
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Well, 87% of the time they didn't even
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notice.
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They simply said, well, I prefer
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blondes.
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Even though they'd actually chosen the
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brunette.
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So, they didn't recognize their choices
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even though, supposedly, their choices
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were in line with their preferences.
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It turns out that we don't always
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recognize our preferences, even though
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they're in even though our choices are
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supposed to be in line with them. And
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this happens not just on simple things
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like could we find more attractive, but
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it happens on the really important
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decisions in life.
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Most of us would agree that one of the
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most important decisions we make in our
00:09:05
life is in figuring out what career path
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we're going to undertake.
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What job do I really want to start my
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career off with?
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What are we all told to do?
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Go walk along the beach and reflect and
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think about, what do you want? Who do
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you want to be?
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Does it help?
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An old graduate student, Rachel Wells,
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and I decided to find out. Does it help
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people to ask themselves, what is it
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that they want when looking for a job?
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We interviewed graduating
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from 11 institutions across the nation,
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including the University of
00:09:42
Pennsylvania.
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And we asked these graduating seniors
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what they were looking for in a job.
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We asked them in September,
00:09:51
in December, and in May.
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May is about the time when most of them
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had already accepted their job offers.
00:09:58
In September, they said things like,
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"Well, I'm I'm I'm looking for job
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security, and I'm looking for work
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that's interesting. It'll give me
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autonomy."
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And in fact, they were given a set of 13
00:10:10
different attributes, and they ranked
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order them on how important they were.
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All the usual self suspects.
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In December, they were asked the same
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question.
00:10:20
It changed. Now, what they said they
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wanted was different.
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Autonomy wasn't so important. Job
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security, income was becoming more
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important.
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By May, when they had accepted their
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final job offer, their preferences had
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changed yet again.
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Well, maybe this isn't so surprising,
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cuz after all, they're learning about
00:10:39
the various options available to them,
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and as time progresses, as they learn
00:10:42
about the kinds of job offers available
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to them, they're adapting and adjusting
00:10:46
what they want to what's available. That
00:10:48
makes some sense.
00:10:50
In fact, the correlation between what
00:10:52
they said they wanted in September and
00:10:54
what they got in May was about
00:11:01
But who's happier?
00:11:03
The people who remembered that what they
00:11:04
got in May was different from what they
00:11:06
said they wanted in September?
00:11:10
Were the people who thought what they
00:11:12
got in May was exactly what they wanted
00:11:15
all along?
00:11:18
When you actually look at who's happy,
00:11:20
it turns out that the people who
00:11:22
remembered what they wanted in September
00:11:25
were less satisfied with the job offer
00:11:27
that they accepted.
00:11:29
In fact, they were more likely to be
00:11:31
thinking about how they wanted to jump
00:11:33
ship and try out a different job in a
00:11:35
year.
00:11:37
When you looked at the number of job
00:11:38
offers received,
00:11:40
well, then too, you found that the
00:11:43
people who remembered what they wanted
00:11:45
in September got fewer job offers.
00:11:50
So,
00:11:51
if you didn't remember what you wanted
00:11:53
way back in September, it turned out you
00:11:55
were happier and you got more job
00:11:57
offers.
00:11:59
Maybe there's some truth to that old
00:12:00
saying that we were all told by our
00:12:02
grandmothers that, you know, happiness
00:12:05
doesn't come from getting what you want,
00:12:08
but wanting what you got.
00:12:13
In spite of the fact that we don't
00:12:15
always know what'll make us happy when
00:12:16
we make a choice, we feel more and more
00:12:19
pressure today to make choices that are
00:12:21
in line with our preferences and to know
00:12:23
our preferences and to make choices in
00:12:25
accordance with that.
00:12:27
In his book, The Powers of Freedom,
00:12:29
sociologist Nikolas Rose writes,
00:12:32
"Modern individuals are not merely free
00:12:35
to choose, but obliged to be free, to
00:12:38
understand and enact their lives in
00:12:40
terms of choice.
00:12:43
They must interpret their past and dream
00:12:45
their futures as outcomes of choices
00:12:48
made and choices still to be made.
00:12:51
Their choices are in their turn
00:12:53
realizations of the attributes of the
00:12:56
choosing person,
00:12:57
expressions of personality,
00:13:00
that reflect back on the person who made
00:13:02
them."
00:13:05
We associate choice with freedom,
00:13:08
and we've come to believe that choosing
00:13:10
is the practice of freedom.
00:13:14
So, when we make a choice, we're not
00:13:16
just asking, "What do I need and want?"
00:13:20
We're asking ourselves something much
00:13:21
more complex.
00:13:23
What we're really asking ourselves is,
00:13:25
"Who am I? And given who I am, what do I
00:13:28
want? And given what I want, what should
00:13:31
I choose?
00:13:33
Expressing ourselves through choice
00:13:36
gives us the opportunity to establish
00:13:39
ourselves as unique individuals. It
00:13:41
enables us to distinguish ourselves from
00:13:43
other people. Some might say it even
00:13:45
gives us the opportunity to completely
00:13:47
customize ourselves.
00:13:49
But only enough, this type of
00:13:51
self-expression can feel more like an
00:13:54
obligation at times than a choice.
00:13:58
I'd like to tell you a story about my
00:13:59
husband, Garud.
00:14:01
A few years ago,
00:14:03
he wanted he he told me he wanted the
00:14:05
new iPhone for his birthday. So, I woke
00:14:08
up at 3:00 in the morning,
00:14:10
ran down to the Apple Store to get him
00:14:12
this new iPhone that had just come out.
00:14:14
He told me he wanted the black because
00:14:15
it doesn't get as dirty and it looked
00:14:17
sleeker than the white option available.
00:14:20
I stood in line ready to get him his new
00:14:22
iPhone. By 10:00 in the morning, just as
00:14:24
I'm putting in the order, he rushes into
00:14:26
the store,
00:14:28
all frazzled, runs up to the desk, and
00:14:30
switches the order. "I'm sorry, sir. Can
00:14:32
you switch that to the white?"
00:14:34
"To the white?" I say. "But you told me
00:14:35
you wanted the black."
00:14:38
"I looked it up online. Everybody is
00:14:40
picking the black. I I can't have what
00:14:42
everybody else is having. Haven't you
00:14:43
seen what everybody else is carrying out
00:14:45
the store?"
00:14:46
Of course, I hadn't.
00:14:50
He knew what he wanted.
00:14:52
He knew why he wanted what he wanted.
00:14:54
And he knew that the reasons why he
00:14:55
wanted what he wanted had nothing to do
00:14:57
with the reasons why everybody else
00:14:58
wanted what they wanted.
00:15:00
But when he saw what everybody else was
00:15:02
choosing, he decided to assert his
00:15:04
individuality
00:15:06
rather than choose the one he wanted.
00:15:10
Now, we've all seen ourselves in similar
00:15:12
situations. You know, there's that time
00:15:14
when we're in the restaurant with our
00:15:16
colleagues or our friends, and the
00:15:18
waiter comes over and order and asks the
00:15:20
first person, "What do they want?" And
00:15:21
they order the filet mignon with the
00:15:23
burgundy sauce, which is exactly what
00:15:25
you were thinking of.
00:15:26
Then the next person's asked, and they
00:15:27
order the same thing.
00:15:29
Then the waiter comes to you. Now you're
00:15:31
wondering, "Hmm, do I just tell
00:15:33
everybody that I was planning to order
00:15:35
that all along?
00:15:36
Or do I also consider the other options
00:15:39
that I was thinking about before I
00:15:42
picked thought about the filet mignon
00:15:43
and burgundy sauce?"
00:15:46
In fact,
00:15:48
this dilemma of individuality, this
00:15:50
desire not to be a or be a or look like
00:15:54
a copycat has been documented by lots of
00:15:56
scientific studies.
00:15:58
In one study, they actually looked at
00:16:00
people's order orders of beers in a
00:16:02
microbrewery. They had people order
00:16:04
their beers in one of two ways. The
00:16:06
normal way, where everybody goes one by
00:16:08
one,
00:16:09
or a different way in which everybody
00:16:11
puts in their order privately to the
00:16:13
waiter.
00:16:14
What happens? Well, when you order
00:16:16
privately, everybody is more likely to
00:16:18
order the same thing as everybody else.
00:16:20
Doesn't happen when you all order the
00:16:21
normal way.
00:16:23
But also what's quite interesting, it's
00:16:25
the people who order privately that are
00:16:26
actually happier with their beer than
00:16:28
the people who order sequentially.
00:16:30
The only people that were happy when
00:16:32
they ordered sequentially
00:16:33
were the people who ordered first.
00:16:37
Even when we know what we want, we don't
00:16:39
always feel comfortable choosing what we
00:16:41
want.
00:16:43
We start to question ourselves. Is that
00:16:44
really what I wanted? If those other
00:16:46
people want what I want, well, I don't
00:16:49
want to be like those other people. So,
00:16:50
maybe that isn't really what I want.
00:16:53
So, then I'm left with a question. So,
00:16:55
what do I want?
00:16:57
And at that point, I return back to the
00:16:59
problem of the obligation to choose,
00:17:01
because choice is never a solitary
00:17:03
activity.
00:17:05
Though we think of choice as a means to
00:17:07
individuate ourselves, we never choose
00:17:10
alone.
00:17:11
By this, I mean that every act of choice
00:17:14
is an act of communication. Like body
00:17:17
language, It's generated by us,
00:17:19
sometimes consciously, sometimes
00:17:20
unconsciously.
00:17:22
And each time we're sending a message to
00:17:24
other people.
00:17:26
Most of the time the message I want to
00:17:27
send to you is look at me, I'm unique,
00:17:31
but you can still relate to me. I'm an
00:17:33
individual, not an outcast.
00:17:39
So,
00:17:40
what are our preferences for unique
00:17:42
things anyway?
00:17:45
A few years ago
00:17:47
I did a a study with a colleague of
00:17:49
mine, Daniel Ames, in which we looked at
00:17:51
people's actual preferences for unique
00:17:53
things. So, we asked people to tell us
00:17:56
how much they liked a whole bunch of
00:17:58
things, like names you would give your
00:17:59
child, ties, sunglasses, shoes. How much
00:18:02
do you like these things? How unique you
00:18:04
things unique or common you think these
00:18:06
things are? And how much you think other
00:18:08
people would actually like these things?
00:18:11
To give you an idea, names went from the
00:18:13
common names like Mike to Addison, which
00:18:16
is more unique, to the really a more
00:18:19
unusual names like Nehemiah.
00:18:21
Ties went from the standard black or red
00:18:24
to the slightly unique paisleys or
00:18:26
stripes or the really wild ones with
00:18:28
neon orange leopard prints or shiny
00:18:31
disco balls.
00:18:34
Everyone thought that they were more
00:18:35
unique than everyone else.
00:18:37
Everyone thought that they liked more
00:18:39
unique things than everyone else.
00:18:42
In fact,
00:18:43
they all liked the same things.
00:18:45
Everybody liked things that were not too
00:18:47
boring,
00:18:48
not too bizarre,
00:18:51
just right with something that was
00:18:53
slightly unique.
00:18:56
One participant put it quite well.
00:18:59
When you're wearing a suit, the tie is
00:19:01
the one thing that can show off your
00:19:03
taste and personality.
00:19:06
But some of these ties just have way too
00:19:07
much personality and not enough taste.
00:19:10
It's just not right to wear an
00:19:11
avant-garde tie.
00:19:14
We aspired to be unique, but we still
00:19:17
want our choices to be understood.
00:19:21
There's a fine line between having a
00:19:23
flair for dramatic neckwear or being
00:19:26
called a social don't.
00:19:28
And in the end, we'd rather play it
00:19:30
safe.
00:19:32
Most of us would like to stand apart
00:19:34
from the majority,
00:19:36
but not in a way that makes us a member
00:19:38
of a glaring and lonely minority.
00:19:43
With so much to think about,
00:19:45
who am I? And given who I am, what do I
00:19:48
want? And given what I want, what do I
00:19:51
choose? And if I choose that, what
00:19:53
message am I really sending to other
00:19:55
people? Is it any wonder that we tend to
00:19:58
be confused and overwhelmed? At times,
00:20:00
we might just turn what ought to be a
00:20:02
simple choice into an ordeal.
00:20:05
And then we find ourselves scratching
00:20:06
our head and asking ourselves, "Why did
00:20:08
I choose that? That isn't what I really
00:20:10
wanted, was it?
00:20:12
Why did I choose this thing that I'm
00:20:13
really not happy with?"
00:20:16
This problem we have with choice has
00:20:19
become even more acute as the obligation
00:20:21
to choose has become even greater, and
00:20:24
as the number of choices have
00:20:25
proliferated in our society.
00:20:29
Think about it.
00:20:31
Today, we make choices that were
00:20:33
unimaginable before. We can choose our
00:20:36
careers, our spouses, where we want to
00:20:38
live, where we want to travel, how we
00:20:39
want to schedule our entertainment,
00:20:41
which one of a hundred different kinds
00:20:42
of jams we want to spread across our
00:20:43
toast, more than that, different flavors
00:20:45
and brands of soda we want to have with
00:20:47
our meals.
00:20:49
The typical grocery store in 1949
00:20:52
offered us 3,700 products.
00:20:55
Remember the old days in which you could
00:20:56
have a a Ford Model T in any color as
00:20:59
long as it it was black?
00:21:02
Today, the typical grocery store has
00:21:05
35,000
00:21:06
options available. In the typical
00:21:08
Walmart, 100,000 options available.
00:21:12
And online, you have 27 million books
00:21:15
available to you on amazon.com and 15
00:21:18
million date possibilities available to
00:21:20
you on match.com.
00:21:24
When I was a graduate student,
00:21:26
I became really interested in looking at
00:21:28
choice and the effects of offering
00:21:30
people more choice.
00:21:33
I used to go to this grocery store
00:21:34
called Draeger's. It was like going to a
00:21:36
mini amusement park. It was like a
00:21:38
thrill into itself. You'd walk into the
00:21:40
store and it just it was like a little
00:21:42
wonderland. You had so many different
00:21:44
choices about so many different things.
00:21:47
They had 250 different kinds of
00:21:49
mayonnaises and mustards and vinegars
00:21:51
and over 500 different kinds of fruits
00:21:53
and vegetables. And here's the olive
00:21:55
oil. They had 75 different olive oils in
00:21:59
their olive oil aisle.
00:22:01
They even had some that were in a locked
00:22:03
case.
00:22:05
Well, I used to go to this store
00:22:07
regularly and I found that I rarely
00:22:08
bought anything even though it was kind
00:22:11
of cool store and I liked going there.
00:22:13
In fact, there were regularly these
00:22:14
busloads of Japanese tourists that would
00:22:16
show up and take lots of pictures and it
00:22:19
wasn't clear they were buying much.
00:22:21
So, I went up to the manager one day and
00:22:23
I said, "Well, so is this model of
00:22:24
offering people lots and lots of choice
00:22:26
is it working?"
00:22:28
The manager said, "Well, of course.
00:22:29
Haven't you seen all the customers we
00:22:31
have through the store?"
00:22:33
Well,
00:22:34
we decided to do a little experiment.
00:22:38
We decided to do an experiment with jam.
00:22:41
So, here's their jam aisle. They had 348
00:22:44
different kinds of jam.
00:22:47
We set up a tasting booth in which we
00:22:49
either put out six different flavors of
00:22:51
jam and this was near the entrance to
00:22:52
the store or we put out 24 different
00:22:55
flavors of jam.
00:22:57
And we kept rotating these displays.
00:22:59
And we looked at two things.
00:23:01
In which case are people more likely to
00:23:04
stop and sample a jar of jam?
00:23:07
And second,
00:23:09
when the people stop, who's more likely
00:23:11
to buy a jar of jam? Everybody was given
00:23:14
a coupon giving them an opportunity to
00:23:15
get $1 off if they bought a jar of jam.
00:23:19
So, what happened?
00:23:21
Well, it turns out
00:23:23
that people were more likely to stop
00:23:25
when there were 24 jams on display. 60%
00:23:28
of the customers stopped when there were
00:23:30
24 jams.
00:23:32
But when there were six jams on display,
00:23:35
only 40% of the customers stopped.
00:23:40
Well, when you looked at their actual
00:23:41
purchasing behavior, you saw the
00:23:43
complete opposite.
00:23:45
Of the people who stopped when there
00:23:47
were 24 jams, only 3% of them actually
00:23:49
bought a jar of jam.
00:23:51
Of the people who stopped when there
00:23:53
were six jars of jam on display, though,
00:23:55
30% of them actually bought a jar of
00:23:57
jam.
00:23:59
If you do the math, people were actually
00:24:02
six times more likely to buy a jar of
00:24:04
jam if there were six on display than if
00:24:07
there were 24.
00:24:09
Why?
00:24:10
They were more attracted to the larger
00:24:12
display, but when it came down to
00:24:14
buying, they were more likely to buy
00:24:17
when there were fewer jams on display.
00:24:21
Why?
00:24:22
We decided
00:24:24
to look at the data we collected in the
00:24:26
jam aisle itself.
00:24:29
We had this
00:24:30
research assistant that was dressed as a
00:24:32
as a store employee pretending to take
00:24:35
inventory.
00:24:36
So, that person was standing there and
00:24:38
taking notes and all the customer
00:24:39
conversations that took place in that
00:24:41
jam aisle.
00:24:42
And we observed two kinds of customers.
00:24:46
One set of customers, when they were in
00:24:48
the jam aisle,
00:24:49
it was really quick. That lemon curd was
00:24:52
great, wasn't it? It sure was. In and
00:24:55
out in less than 10 seconds.
00:24:58
The other set of customers had a long
00:25:00
conversation.
00:25:02
Boy, that lemon curd was great, wasn't
00:25:04
it? Yeah, but so was the Victoria plum.
00:25:07
Hey, and we didn't even try this little
00:25:09
scarlet. That looks kind of interesting,
00:25:10
too.
00:25:11
Sometimes that conversation would go on
00:25:13
for 10 minutes or more, at which point
00:25:15
somebody would usually wake up and say,
00:25:17
"Hey, look, let's check out the rest of
00:25:18
the stuff in the store. We'll come back
00:25:20
to jam."
00:25:24
We all knew
00:25:26
that our eyes were too big for our
00:25:27
stomachs. But, is it possible that our
00:25:29
eyes are actually too big for our minds,
00:25:31
too?
00:25:33
In addition to having to think about who
00:25:35
I am and what do I want, we also have to
00:25:38
do the math of comparing and contrasting
00:25:40
all the options that confront us. Can we
00:25:42
do it? Can our minds really handle that
00:25:45
much choice?
00:25:47
You don't have to look very far to find
00:25:48
out that we really do have some
00:25:50
cognitive limitations that would affect
00:25:52
our ability to keep track of an infinite
00:25:54
array of options.
00:25:56
Way back in 1956,
00:25:58
the seminal psychologist George Miller
00:26:01
did the the famous paper called the
00:26:03
magical number seven plus or minus two,
00:26:06
in which he illustrates compellingly and
00:26:09
documents the fact that beyond seven
00:26:11
plus or minus two things, no matter what
00:26:14
they are,
00:26:15
things you look at, things you taste,
00:26:17
things you smell, things you feel,
00:26:20
numbers, words, no matter what it is,
00:26:22
beyond seven plus or minus two, you just
00:26:25
can't keep track of it. The information
00:26:26
just starts crumbling away.
00:26:31
Well, in today's world, we have to
00:26:33
choose from a lot more than seven plus
00:26:35
or minus two.
00:26:37
And what do we do?
00:26:39
Most of the time,
00:26:42
we typically decide to put it off,
00:26:44
or choose a familiar option, or find
00:26:46
them some other
00:26:48
strategy to just get ourselves out of
00:26:50
the situation.
00:26:52
Well, that's okay when you're only
00:26:53
talking about jam. It's really not
00:26:54
imperative that you pick a jar of jam or
00:26:57
even pick the best jar of jam.
00:26:59
But, what if it was something really
00:27:00
important? Something that really affects
00:27:03
your life in a meaningful, substantive
00:27:05
way.
00:27:07
In 2001,
00:27:09
I received a call from Steve Utkus, the
00:27:11
director of the Vanguard Research
00:27:13
Center.
00:27:15
He was puzzled by a phenomenon that they
00:27:17
were beginning to observe in people's
00:27:19
401k plans.
00:27:22
He was observing that people weren't
00:27:23
participating in their 401k plans as
00:27:26
much as they should, even though they
00:27:28
were actually offering people more and
00:27:30
more options.
00:27:33
So, he asked me to look at the data
00:27:36
and and answer with a question of
00:27:39
whether more choices that they were
00:27:41
offering the 401k plans was actually
00:27:44
helping participation rates or not.
00:27:47
Now, if you think about the 401k
00:27:49
decision, in many ways you can think of
00:27:51
it as a no-brainer, really. I mean, you
00:27:53
take part of your income every month and
00:27:55
put it away tax-free and your employer
00:27:57
matches you dollar for dollar for the
00:27:59
amount that you put away. So, it's
00:28:00
literally free money in the bank.
00:28:03
If you choose not to participate, it's
00:28:05
literally like throwing free money into
00:28:07
the garbage can. And who among us wants
00:28:09
to do that?
00:28:11
So, it makes total sense to participate
00:28:13
in your 401k plan. In fact, even if you
00:28:15
have no idea where to put your money,
00:28:18
if you just randomly toss the die,
00:28:20
you're you're still better off than if
00:28:23
you choose not to participate.
00:28:26
When he gave me the data
00:28:29
for over 650 plans, nearly a million
00:28:32
nearly a million people,
00:28:35
we had lots of data on the individual
00:28:37
demographics of the people. We had data
00:28:39
about the size of the firm and industry
00:28:42
of the firm. And when we looked, we
00:28:44
found that indeed there was a
00:28:46
correlation between the number of funds
00:28:48
that a plan offered and people's actual
00:28:51
participation rates.
00:28:54
As the number of options increased,
00:28:55
participation rates dropped.
00:28:58
If you look at the participation rates,
00:29:00
if they had less than 10 funds,
00:29:01
participation rates were around 75%,
00:29:04
which are still not as high as you'd
00:29:06
like it to be.
00:29:08
Once the number of options grew to over
00:29:10
50, participation rates dropped to 60%.
00:29:16
Think about the ramifications of that,
00:29:19
particularly in light of the fact that
00:29:20
today, Fidelity actually offers you
00:29:23
4,500
00:29:25
options.
00:29:28
The deleterious effects of offering
00:29:30
people more and more choice haven't just
00:29:33
been observed with jams and retirement
00:29:35
savings plans, but have been observed
00:29:36
across a variety of different choosing
00:29:38
domains,
00:29:39
ranging from things like choosing a
00:29:41
chocolate to going on a date to health
00:29:45
care decisions.
00:29:47
When your head is spinning with so much
00:29:50
choice, is there anything you can do to
00:29:52
help yourself out?
00:29:54
When you live in a world with so much
00:29:56
choice, is there anything you can do to
00:29:58
help yourself from becoming overwhelmed
00:30:01
from the demands of self-expression
00:30:04
and the math of comparing and
00:30:05
contrasting all these options?
00:30:09
We've been doing some studies in which
00:30:11
we find that indeed, we can teach
00:30:13
ourselves to do better when we choose.
00:30:16
We can ease ourselves in and practice,
00:30:19
practice, and practice. And if we do
00:30:22
this, we can get more out of choice in
00:30:24
our lives.
00:30:27
Most of us would agree that we wouldn't
00:30:29
feel comfortable throwing our children
00:30:31
into a calculus class if they hadn't
00:30:33
first mastered algebra.
00:30:35
Yet, we regularly throw ourselves into a
00:30:37
choosing exercise without any
00:30:39
preparation.
00:30:41
We're seduced by the possibilities and
00:30:43
convince ourselves that once I'm in the
00:30:45
moment, that right choice, that that
00:30:48
perfect expression of who I am and what
00:30:51
I want, will just scream out at me. I'll
00:30:54
know it's when I see it. That's what we
00:30:56
tell ourselves.
00:30:58
Of course, that rarely happens.
00:31:00
But we can get more out of choice if we
00:31:03
take a more methodical approach to the
00:31:07
way we choose.
00:31:10
To give you an idea of what I'm talking
00:31:12
about,
00:31:13
we recently did a study
00:31:16
with the with a German car manufacturer.
00:31:20
This German car manufacturer, this was
00:31:22
done in Europe, happens to allow its
00:31:25
customers to completely custom make
00:31:28
their car. So, it's a bit different than
00:31:29
the way it is in the US. In the US,
00:31:31
you'd go into the car dealership and
00:31:33
pick out a bundle.
00:31:35
Well, in in Europe, you get to
00:31:36
completely custom make your car. So,
00:31:38
that means you're making around 60
00:31:41
different decisions. And per decision,
00:31:44
you have variable number of options. So,
00:31:46
for example, for engines, you could have
00:31:48
four different engines to choose from.
00:31:50
But for exterior car color, you have 56
00:31:53
different exterior car colors.
00:31:56
We convinced this car manufacturing
00:31:58
company
00:31:59
to vary the way in which the decisions
00:32:02
appeared, were presented to the
00:32:04
customer.
00:32:06
So, once a customer had decided to
00:32:07
choose a car, like let's say an Audi A4,
00:32:11
they went onto the computer screen and
00:32:12
now had to answer all these 60 different
00:32:14
questions about what they wanted to
00:32:16
comprise their new Audi A4.
00:32:20
Half of them were randomly assigned to
00:32:23
having their decisions appear from deep
00:32:26
to shallow, meaning we start from 56 car
00:32:30
colors down to 28 different interior car
00:32:34
colors, all the way down to four engines
00:32:36
and four tire rims, etc. So, they're
00:32:39
going from high choice decisions to low
00:32:41
choice decisions.
00:32:44
In the other half of the cases, they
00:32:45
went from shallow
00:32:48
four engines to deep 56 different
00:32:52
exterior car colors.
00:32:55
We now looked at two things. First, in
00:32:58
which case are people getting more tired
00:33:01
of choosing?
00:33:02
How do we measure that? We looked at the
00:33:05
likelihood of choosing the default. So,
00:33:07
per decision, if you don't want to make
00:33:08
a choice, you just go beep
00:33:11
and you get the default choice. So, you
00:33:12
get the default car color, silver gray.
00:33:17
What happens? Well, if you see here, if
00:33:20
you go from deep to shallow, in the
00:33:22
beginning people seem to be engaged.
00:33:24
They're really thinking about what
00:33:25
choice they should make, but they
00:33:27
quickly get tired and now they start
00:33:28
just hitting the default button.
00:33:30
Across the board.
00:33:32
They're disengaged.
00:33:34
When they went from shallow to deep,
00:33:36
though,
00:33:39
initially they start off a little slow,
00:33:41
but then you see practically no default
00:33:45
rate. They're completely engaged.
00:33:47
They're not even defaulting when they
00:33:48
get to the 56 car colors.
00:33:52
Who's happier? Who reports being more
00:33:54
satisfied with their car in the end?
00:33:57
Again, the shallow to deep end up
00:34:00
reporting being more satisfied with the
00:34:02
car that they have selected.
00:34:05
We can handle more choice if we ease
00:34:08
ourselves into it. If we go from shallow
00:34:11
to deep, we can handle it much more
00:34:13
easily.
00:34:15
Why? Because as we start off in the
00:34:17
shallows, we learn some of the very
00:34:19
techniques that the experts do when
00:34:21
they're making a choice. We learn how to
00:34:24
choose. We learn how to dump out the
00:34:26
irrelevant options. And gradually as
00:34:28
we're more and more engaged with this
00:34:30
choosing exercise and we're building the
00:34:32
car.
00:34:34
We start to envision this product as a
00:34:36
whole.
00:34:37
And we get more into it.
00:34:41
We found the same effect not just with
00:34:42
customizing your car, but pretty much
00:34:44
any kind of customization project,
00:34:47
whether it be a sandwich or a suit.
00:34:52
You know, it's often tempting to go to
00:34:54
the store that offers you a lot of
00:34:55
choice. After all, it seems like
00:34:57
one-stop shopping, and you're more
00:34:59
likely to find that perfect thing for
00:35:01
you.
00:35:02
But often that's a good recipe to get
00:35:04
yourself completely confused.
00:35:07
So, let's say you need to buy a bottle
00:35:08
of wine.
00:35:10
Something you don't want to screw up.
00:35:11
You have to take it to your boss's
00:35:12
house.
00:35:14
You may actually be better off going to
00:35:15
the store not that offers you thousands
00:35:17
of different bottles of wine. Not that
00:35:20
wine wholesaler.
00:35:21
But go to the store that limits your
00:35:23
choices, that teaches you about the
00:35:26
product, that helps you become a little
00:35:29
bit of that mini expert.
00:35:31
Consider this store Best Cellars. It was
00:35:33
named the best wine store in 2009.
00:35:37
This store offers only 100 different
00:35:39
wines,
00:35:40
eight categories, about 10 category 10
00:35:43
to 11 choices per category.
00:35:48
What that does is when you have it
00:35:50
categorized, we can quickly rule out the
00:35:52
categories that we don't like.
00:35:55
So, we can rule out fruity and fizzy,
00:35:58
etc.
00:35:59
And now we focus in on that category of
00:36:02
wines that I am that I am interested in.
00:36:06
And within that category, I only have
00:36:09
about 10 options to look at. Well, that
00:36:11
becomes a lot easier. I'll focus in on
00:36:14
the information about those 10 options,
00:36:16
learn about that wine, and when I
00:36:19
actually choose a bottle of wine and
00:36:20
take it to my boss's home, I might
00:36:22
actually show off a bit of a knowledge
00:36:24
about that bottle of wine cuz I actually
00:36:26
understood what I chose. And over time,
00:36:30
not only do I develop a greater
00:36:32
expertise of the different kinds of
00:36:33
wines out there, but I develop a greater
00:36:35
expertise about the kind of wine I like.
00:36:39
Now, that helps me become more prepared
00:36:42
for the for the eventual day when I
00:36:44
actually might be ready to finally go to
00:36:46
that store that offers me more and more
00:36:49
options.
00:36:52
But should we always exert this much
00:36:55
energy and effort into the choices we
00:36:58
make? Should we exert all this energy
00:37:00
into identifying all the complexities
00:37:02
associated with the choice set
00:37:04
confronting me?
00:37:06
Or are there times when it's actually
00:37:08
better off we're better off just
00:37:10
avoiding the choosing process just
00:37:13
saying look, I don't need to choose
00:37:15
this.
00:37:16
Take for example the choice of what nail
00:37:18
polish color to put on yourself.
00:37:21
You know, we we think nail polish is
00:37:22
pretty important cuz it has to do with
00:37:24
our appearance and and by extension that
00:37:26
means that it has something to do with
00:37:28
says something about our identity.
00:37:31
I'm really intrigued by such choices
00:37:33
mainly because they're they're quite
00:37:35
visual and I can't see these choices and
00:37:37
I can't see what other people are
00:37:38
choosing and therefore I have to rely
00:37:41
heavily on other people's opinions.
00:37:45
So, take for example one time when I was
00:37:47
in the manicure salon and I was choosing
00:37:49
between two very light shades of pink.
00:37:53
One was called ballet slippers and the
00:37:54
other one was called adorable.
00:37:58
So, I decided to ask these two ladies
00:37:59
which one which two ladies at the
00:38:01
manicure salon which one I should pick.
00:38:04
Well, the one lady said, "Well,
00:38:05
definitely pick ballet slippers." "Why?"
00:38:07
I asked. "Ah, it's just an elegant shade
00:38:10
of pink. It'll look really good on you."
00:38:13
I asked the other lady. She says, "No,
00:38:15
no, you should pick adorable.
00:38:18
It's a really glamorous shade of pink. I
00:38:20
think that will look better.
00:38:24
I don't understand. What's the
00:38:26
difference between these two colors?
00:38:29
Just trust us.
00:38:31
You would know the difference if you
00:38:33
could see it.
00:38:35
Well,
00:38:36
maybe.
00:38:37
Being the annoying academic that I am, I
00:38:39
decided to test this out.
00:38:42
I decided to bring these two bottles of
00:38:44
nail polish into the laboratory. I
00:38:46
stripped the labels off.
00:38:48
And now I asked a whole bunch of
00:38:49
undergraduate women at Columbia
00:38:50
University. And I asked them, which one
00:38:52
would you pick?
00:38:54
Well, 50% of the women couldn't tell
00:38:56
them apart, and they assumed that I was
00:38:57
playing a trick on them.
00:38:59
They swore up and down there was
00:39:00
actually the same color in two bottles.
00:39:02
Now I wondered who the trick was really
00:39:03
on.
00:39:05
Of the other 50%,
00:39:07
more of the women chose Adorable than
00:39:09
Ballet Slippers.
00:39:11
Then I decided to put the labels back
00:39:12
on. When I put the labels back on,
00:39:15
well, now it turns out more of the women
00:39:17
chose Ballet Slippers.
00:39:19
So, what are they really choosing? Are
00:39:21
they choosing on the basis of the color
00:39:23
or the name?
00:39:26
These days when I go to the beauty salon
00:39:28
and have to get nail polish on my nails,
00:39:30
I just flip a coin.
00:39:33
The difference between pink and red is a
00:39:36
meaningful one because the choice
00:39:38
actually is one that says something
00:39:40
about what I like and what I want.
00:39:42
The difference between Ballet Slippers
00:39:44
and Adorable, though, barely exists. And
00:39:46
yet we feel compelled to deliberate over
00:39:49
the choice.
00:39:52
Ever-increasing choice means that we
00:39:54
begin to assign importance to what might
00:39:58
amount to trivial differences.
00:40:01
And we focus so much on these details,
00:40:05
perhaps
00:40:06
forgetting about whether
00:40:08
whether this really is part of our
00:40:10
larger goals.
00:40:13
Perhaps we forget about the larger
00:40:14
picture.
00:40:17
Is this how we really want to spend our
00:40:19
limited resources when it comes down to
00:40:22
our time and our energy and our
00:40:24
cognitive resources?
00:40:27
I'm not here to dictate to you what's
00:40:29
and when you should choose,
00:40:31
but I would like to encourage you to be
00:40:33
more choosy about choosing.
00:40:37
There's nothing wrong with saying, "I'd
00:40:39
like to have less choice, please. I'll
00:40:42
have what you're having.
00:40:43
I choose not to choose."
00:40:47
Sometimes these are the best things we
00:40:48
can do for ourselves, and they don't
00:40:50
diminish our freedom or our
00:40:51
individuality.
00:40:55
Each of us ought to ask ourselves, which
00:40:57
choices are really worth making?
00:40:59
And which ones are simply distracting me
00:41:01
from my larger goals?
00:41:05
We need to rethink the assumption that
00:41:07
every opportunity to choose is an
00:41:09
opportunity to inch closer to my dreams,
00:41:12
to improve my lot.
00:41:14
Choice is not just the exercise of
00:41:16
picking X over Y,
00:41:19
but it's a responsibility
00:41:21
to separate the meaningful and the
00:41:22
uplifting
00:41:23
from the trivial and the disheartening.
00:41:28
Don't get me wrong.
00:41:30
Choice is absolutely the most powerful
00:41:33
tool we have in our lives. It's the only
00:41:36
tool we have that enables us to go from
00:41:39
who we are today to whom we want to be
00:41:42
tomorrow.
00:41:44
But it does not fulfill all our needs.
00:41:47
It does not solve all our problems.
00:41:50
Sometimes it's not enough.
00:41:53
Sometimes it's too much.
00:41:57
In the recent Oscar-winning movie, Hurt
00:41:59
Locker,
00:42:00
it portrayed a character, Sergeant
00:42:03
William James, as a man who made a lot
00:42:05
of choices.
00:42:07
A lot of choices under very little time.
00:42:09
And he made all these decisions under
00:42:12
considerable amount of stress
00:42:14
with considerable amount of aplomb.
00:42:17
At any moment, if he made the wrong
00:42:19
choice, he might have died, his comrades
00:42:22
might have died, as he was trying to
00:42:24
decide how to best disable a whole bunch
00:42:27
of explosives.
00:42:30
When he returns home
00:42:33
after his duty in Iraq,
00:42:36
he's shown having spending some time
00:42:38
with his family. And at one point, his
00:42:41
girlfriend asks him to go pick out a box
00:42:43
of cereal in the grocery store.
00:42:45
He's seen here Here's the grocery store.
00:42:47
Here Here's the cereal aisle in the
00:42:49
grocery store.
00:42:50
He's seen here looking at the cereals,
00:42:53
first being amused, then being confused,
00:42:57
then being annoyed.
00:43:00
At the end of the movie, he decides to
00:43:02
go back to Iraq.
00:43:04
It's as if he's saying he wants to
00:43:06
restore meaning to his choices and by
00:43:08
extension to his life.
00:43:12
I think we've come to believe that every
00:43:15
choice is important and that we must
00:43:18
make all our own choices because this
00:43:21
gives us an illusion of control.
00:43:24
But all of us must contend with the
00:43:27
limits that we naturally come up against
00:43:29
over the course of our lives.
00:43:32
And all of us must be prepared to let go
00:43:34
of those choices that do not serve us
00:43:36
well.
00:43:38
I did not choose blindness.
00:43:40
Because I was blind, there were many
00:43:42
choices that were taken off the table,
00:43:44
among them being a pilot.
00:43:47
But this bodily condition that I did not
00:43:49
choose
00:43:51
enabled me to take advantage of the
00:43:53
choices that I could make.
00:43:55
It reminds me every day to focus on the
00:43:57
choices that matter.
00:44:01
Balancing our hopes, desires, and an
00:44:04
appreciation for the possibilities
00:44:07
with a clear-eyed assessment of the
00:44:09
limitations.
00:44:11
That is the art of choosing.
00:44:21
I was interested in hearing you talk
00:44:23
about the grocery shopping experience
00:44:25
and the fact that
00:44:27
uh we all know the problem of going into
00:44:29
a grocery store and seeing
00:44:31
toothpaste, cereal, soaps, etc. that are
00:44:34
are actually overwhelming. But I'm
00:44:36
wondering what the logical outcome of
00:44:38
this is for the manufacturers of these
00:44:40
products. They have to keep offering
00:44:42
more and more choices because they want
00:44:44
to be competitive and they don't want to
00:44:46
fall behind and in in being unresponsive
00:44:49
to consumers. But
00:44:51
but at what point do these manufacturers
00:44:53
realize that they are actually turning
00:44:55
off their customers and at what point
00:44:57
will one of them step up and say "Enough
00:44:59
is enough. We're going to go back and
00:45:01
we're going to offer you five good
00:45:03
products." I mean is this a reality or
00:45:05
is this is this not possible in the
00:45:07
business world?
00:45:09
That's a great question. So the here's
00:45:11
the pickle, right?
00:45:13
It's become
00:45:15
expected now on the part of customers
00:45:17
that we go into a store that offers us a
00:45:20
lot of choice and we we think that a
00:45:22
store that doesn't offer us a lot of
00:45:24
choice is somehow less valuable, right?
00:45:26
So like even though for example Baskin
00:45:28
Robbins its best slogan ever that really
00:45:30
put Baskin Robbins on the map, it's
00:45:32
still the number one ice cream retailer
00:45:34
in the world
00:45:36
is the 31 flavors.
00:45:38
But did you know that
00:45:39
even for Baskin Robbins 50% of their
00:45:42
sales are accounted for by plain
00:45:44
vanilla, chocolate, and strawberry?
00:45:46
And yet I imagine most of us wouldn't
00:45:48
walk into an ice cream parlor that only
00:45:50
offered us vanilla, chocolate, or
00:45:52
strawberry even if that's exactly what
00:45:54
we were planning on ordering.
00:45:56
So so the pickle is that
00:45:58
we want more choice because we feel that
00:46:01
the those are the more valuable
00:46:02
retailers, but we actually don't take
00:46:05
advantage of it. And then the retailers
00:46:07
put in this possession of having to
00:46:09
offer it, but it actually costs them
00:46:11
money to offer it, and people aren't
00:46:13
going to take advantage of it anyway.
00:46:16
What we have found are First, there are
00:46:20
a growing number of retailers that are
00:46:23
making money by shrinking the choice
00:46:25
set. So, I gave you the example of how
00:46:27
Bestsellers is doing really well.
00:46:29
Aldi, the ninth largest grocery store, I
00:46:33
mean, actually the ninth largest
00:46:34
retailer in the globe,
00:46:36
um it's a it's a grocery store that
00:46:38
exists primarily in Europe, although it
00:46:40
has made a lot of inroads in Middle
00:46:42
America,
00:46:43
only offers its customers 1,400 products
00:46:46
per category. It may only offer you one
00:46:48
kind of tomato sauce, one kind of canned
00:46:51
corn, and it is doing better than all
00:46:54
the other grocery stores. It's doing
00:46:55
very well.
00:46:57
So, there is a model out there that
00:46:59
says, "I'm going to offer you a few
00:47:02
choices, but you can trust me
00:47:05
to offer you either very high quality,
00:47:08
or in the case of Aldi, uh you can trust
00:47:11
me to offer you good price performance
00:47:13
ratio."
00:47:14
So, I think that's one way in which uh
00:47:17
vendor retailers can really start to
00:47:19
think of themselves as being more
00:47:21
competitive.
00:47:22
Another thing that retailers can do,
00:47:24
which we've done now with magazine
00:47:26
aisles at Wegmans grocery stores, we've
00:47:28
also done in with various menus with uh
00:47:31
of coffees and a whole bunch of other
00:47:32
products, where we find that if you
00:47:35
categorize the products, whether it be
00:47:37
wines or magazines or coffees,
00:47:41
or chocolates,
00:47:42
um if you categorize them, we can
00:47:44
actually handle more categories than we
00:47:46
can handle choices.
00:47:48
So, that that's that's one thing that's
00:47:50
good. So, we can handle, say, an average
00:47:52
of about 20 different categories and
00:47:54
about, say, 10 choices per category.
00:47:57
But here's another fascinating thing
00:47:59
about categories.
00:48:02
If I categorize the choice set more,
00:48:06
I can offer you less choice.
00:48:09
Because when I categorize the choices,
00:48:12
you the customer perceives me as
00:48:15
offering you more choice, more variety.
00:48:19
And this isn't a trick. The reason why
00:48:21
it's not a trick is because you the
00:48:23
customer actually understand stand
00:48:25
better
00:48:26
what I'm offering you when I actually
00:48:28
categorize. It's a simple thing that a
00:48:30
lot of retailers can do, but they don't.
00:48:32
So, for example,
00:48:33
I can have one retailer that offers you
00:48:36
334 different kinds of magazines versus
00:48:39
661
00:48:41
magazines, and customers will believe
00:48:43
that the magazine that off that the
00:48:45
magazine aisle that offers them 334 is
00:48:47
actually offering them more than the one
00:48:50
that was offering them 661
00:48:52
just as a function of how those
00:48:55
magazines were categorized and how many
00:48:57
categories, how understood and
00:48:59
understandable were those categories for
00:49:01
them.
00:49:02
I see. Now, I'm wondering what the
00:49:04
implications of this might be for the
00:49:06
internet. A lot of sites that I go to
00:49:09
are very busy, visually busy, and you
00:49:13
know, if you're looking for a product
00:49:14
that's it's hard to find it, and because
00:49:16
they can offer an unlimited number of
00:49:18
products, they often do.
00:49:20
Um, is do you think that the internet
00:49:23
retailers are handling it well, or would
00:49:25
you have some advice you could offer
00:49:26
them?
00:49:29
So,
00:49:30
on the internet,
00:49:32
you have a lot of websites that need to
00:49:34
spend more time categorizing because one
00:49:36
of the biggest complaints you hear
00:49:37
customers making is they just can't they
00:49:39
can't figure out what they're offering,
00:49:41
they can't find anything, and and in
00:49:43
fact, if if anything you do see that
00:49:44
it's those websites that categorize it
00:49:46
well and make it easy on the customers
00:49:49
tend to do better.
00:49:51
The The other thing that many online
00:49:54
vendors are struggling with is how do
00:49:56
you help the customer by giving them
00:49:58
recommendations? They've had mixed
00:50:00
success with recommendations. So,
00:50:02
clearly Zagat's ratings does very well.
00:50:05
New York Times book reviews does very
00:50:08
well. Consumer Reports does very well.
00:50:11
But, Netflix finding out what other
00:50:14
people that are supposedly like you
00:50:16
choose uh or Amazon what other people
00:50:19
supposedly like you chose, it's mis-
00:50:22
mixed success. A lot of people don't
00:50:24
trust it.
00:50:26
And I think what's key to making the
00:50:28
recommendations work is customers have
00:50:31
to believe that it's coming from a
00:50:33
trustworthy source and that it's not
00:50:35
random.
00:50:35
Uh she To what extent does culture
00:50:37
determine the choices people make? Any
00:50:40
Does your research shed any light on
00:50:42
that?
00:50:43
Oh, absolutely. I mean, we are
00:50:45
essentially
00:50:46
all of us are handed a narrative by our
00:50:49
culture uh as to how we should choose.
00:50:54
So, I mean, there's a lot one can say
00:50:56
about that, but let me zero in on say
00:51:00
one question that I raised in today's
00:51:01
talk. This whole burden that we carry
00:51:04
around about who I am and given who I
00:51:07
am, what should I choose and what do I
00:51:09
want?
00:51:10
That is more salient, say for Americans
00:51:15
or people that buy into the more
00:51:16
individualistic cultural schema,
00:51:20
than say members of more collectivist
00:51:22
societies.
00:51:24
So, for example, if you go to Korea or
00:51:27
Japan or India, they're not as fixated
00:51:30
on who who they are and what they want.
00:51:32
They're more likely to want to make sure
00:51:34
that they choose the thing that won't be
00:51:36
a faux pas or won't get them in trouble
00:51:38
with
00:51:39
with whatever social group that they're
00:51:41
trying to be a member of. There's much
00:51:44
more of a a a to fit in
00:51:47
uh rather than trying to stand out. So,
00:51:49
that's one difference. If you go to
00:51:52
ex-communist countries,
00:51:54
they don't see the need for having lots
00:51:56
and lots of choices. One of the things I
00:51:58
discovered actually by surprise when I
00:52:00
was uh interviewing people in Russia and
00:52:03
Eastern European countries was when you
00:52:05
put out 10 different kinds of soda, they
00:52:07
see that as one choice. They don't see
00:52:09
that as 10 different kinds of soda.
00:52:10
They're not invested in the difference
00:52:12
between Coke and Pepsi and Mountain Dew
00:52:14
the way we are. They see that as one
00:52:16
choice. When you ask them, "Well, don't
00:52:18
you know the difference between Coke and
00:52:19
Pepsi and Mountain Dew?" They say,
00:52:20
"Yeah, but it's meaningless.
00:52:23
Wha- Why are you attaching such meaning
00:52:25
to what amounts to soda pop?
00:52:28
If you give me soda pop versus milk
00:52:30
versus juice, okay, I see that as three
00:52:32
choices. But, I don't I don't have the
00:52:35
need to have 10 different kinds of soda
00:52:37
pop. These are not meaningful choices
00:52:39
for me."
00:52:41
So, I think that too you you actually
00:52:42
learn different things about the role
00:52:46
choice plays in your own society at
00:52:48
times by looking at the reactions of
00:52:51
people in other cultures.
00:52:54
So, just keying off that, I mean, you
00:52:56
you gave us the example of the nail
00:52:58
polish. And basically,
00:53:00
there was a meaningless difference in in
00:53:02
in the two colors. In fact, some people
00:53:04
thought they were the same color. But,
00:53:06
there are endless opportunities in our
00:53:07
society for these for these meaningless
00:53:10
choices. And they seem to be getting
00:53:13
to more numerous given as Steve was
00:53:15
saying that the the internet phenomenon
00:53:18
and and all that. Is there any way as
00:53:20
a society or as an individual that we
00:53:23
can
00:53:24
um
00:53:25
make more sort of meaningful um
00:53:28
choices in our lives? I mean, can we set
00:53:31
up situations where we can avoid this
00:53:33
proliferation of meaningless choices? Is
00:53:35
there a way that we can start uh
00:53:37
recognizing that um
00:53:40
you know, the freedom to make a choice
00:53:41
is really a privilege that we're given
00:53:43
and that we shouldn't abuse it.
00:53:46
One of the exercises that I do on the
00:53:48
very last day of class, my MBA class,
00:53:51
so I have all the students, I tell them,
00:53:54
"Jot down everything that's important to
00:53:55
you. You can make that list as long as
00:53:57
you want."
00:53:59
Then after they've spent a good half an
00:54:01
hour, sometimes even spend 45 minutes
00:54:03
jotting down that list of all the things
00:54:05
that are important, I mean, you got to
00:54:06
think about all those things that are
00:54:07
really important to you.
00:54:09
And then I say, "Okay, now go through
00:54:12
that list and cross off everything other
00:54:15
than three things."
00:54:18
And those three things have to be the
00:54:19
things that you cannot under any
00:54:21
circumstances live without. What are
00:54:23
those three?
00:54:25
Now, of course, that takes a lot of
00:54:27
pressure, a lot of
00:54:28
thought. I mean, people are usually
00:54:30
pulling out their hair as they're
00:54:31
stressed out. They they they try to
00:54:33
negotiate with me, "Look, can't I have
00:54:34
at least five? Can't I have at least six
00:54:36
or seven?" You know, I
00:54:38
I say, "No, just three. What are those
00:54:40
three?"
00:54:42
And for those three, I tell them, "You
00:54:45
must maximize. That's when you use that
00:54:47
methodical approach that I described to
00:54:49
you earlier. But for everything else,
00:54:53
find some quick way to satisfice."
00:54:56
So, on those everything else, you're
00:54:59
protecting yourself from a disaster,
00:55:03
but you're not trying to maximize. You
00:55:06
find simple solutions. You know, I'll
00:55:08
have what everybody else is having. I'll
00:55:10
I'll just choose from a few and make a
00:55:12
quick decision. I'll have an expert
00:55:15
choose instead, rather than having me
00:55:17
choose.
00:55:19
When you talk about 45,000 products in a
00:55:21
supermarket, it sounds almost like a
00:55:23
mania has taken hold of us. We we, you
00:55:26
know, we we all want things simplified,
00:55:28
but yet we keep being offered more and
00:55:30
we seem to and consumers seem to respond
00:55:33
to that. It makes me wonder,
00:55:35
is there a business or are there
00:55:37
businesses out there? You mentioned one
00:55:39
with a supermarket having limited
00:55:41
choices, but are there other ways, other
00:55:43
businesses or services that that could
00:55:45
be offered that would just take this
00:55:48
burden of choice, this weight
00:55:50
off of people's shoulders?
00:55:52
Um in other words, giving them a couple
00:55:54
more choices so that they can help
00:55:55
narrow down their choices.
00:55:58
Yeah, well, we saw what happened with
00:56:00
the stock market. You then had mutual
00:56:02
funds come into being and now there's
00:56:04
more mutual funds than there are stocks.
00:56:06
Isn't it like some 8,000 different
00:56:09
mutual funds, which are basically
00:56:10
combinations of combinations of choices?
00:56:13
Um
00:56:15
I think you are beginning, particularly
00:56:18
with the downturn of the economy, you
00:56:20
are beginning to see retailers think
00:56:22
more strategically about how to reduce
00:56:24
their choice set cuz it actually costs
00:56:26
them money to stock it to stock this
00:56:28
much. Uh so you you are beginning to
00:56:31
see, for example, in New York, you have
00:56:33
two Bloomingdale's, the the main
00:56:35
flagship store, but then you have the
00:56:36
smaller one, which really uh
00:56:39
shrinks the choice set. They're they're
00:56:41
trying to dedicate the space to just a
00:56:43
few options per Uh and in fact, many
00:56:46
customers will only go to that one. They
00:56:48
won't go to the other one cuz they find
00:56:49
the other one more overwhelming. Um you
00:56:52
are seeing the rise of personal
00:56:54
shoppers, uh particularly amongst the
00:56:55
upper middle class. You are seeing
00:56:57
boutiques on average shrinking their
00:56:59
choice sets rather than expanding them.
00:57:02
Um so you are seeing the rise of fancy
00:57:05
restaurants that actually offer smaller
00:57:07
menus rather than larger menus.
00:57:10
And and I think you're going to continue
00:57:12
to see that.
00:57:13
Um what advice would you give people so
00:57:15
that they can make better choices?
00:57:20
You mean aside from the one I just uh
00:57:23
mentioned earlier about figure out
00:57:24
what's really important to you and which
00:57:26
are the things you're going to satisfice
00:57:28
on?
00:57:28
Yeah.
00:57:29
Well,
00:57:31
let's say it is something really
00:57:33
important to you.
00:57:35
It's one of that top three.
00:57:37
And that top three is, I really want to
00:57:39
make sure that I make the right choice
00:57:41
of which job offer I'm going to accept.
00:57:45
One of the big questions that
00:57:47
we all,
00:57:49
you know, contemplate is, am I supposed
00:57:51
to go with my gut or am I supposed to go
00:57:53
with reason?
00:57:56
And And let me sort of walk you through
00:57:59
what happens when you go with your gut
00:58:01
versus your reason.
00:58:03
You have job A, job B, and now you're
00:58:05
going to first ask your gut, which one
00:58:07
should I go with?
00:58:08
Your gut answers the question of how do
00:58:11
you feel about job A
00:58:14
or job B
00:58:16
at this moment.
00:58:17
Not how you're going to feel about it
00:58:18
tomorrow, not how you're going to feel
00:58:20
about it 10 years from tomorrow, but how
00:58:22
do you feel about it right now?
00:58:27
Reason analysis, meaning doing the pros
00:58:30
and cons of job of job A versus doing
00:58:32
the pros and cons of job B, provided you
00:58:34
don't do that in the heat of the moment
00:58:36
and you do it over time and with
00:58:37
consultation of other people,
00:58:41
what reason analysis helps you figure
00:58:43
out is which job should make you
00:58:47
happier, should give you more of the
00:58:49
measurable outcomes, should give you
00:58:50
more money, should give you more growth
00:58:52
possibilities, all the things that are
00:58:54
measurable, it'll maximize on that.
00:58:58
Now, if your gut and your reason give
00:59:00
you the same answer, then you're golden.
00:59:03
You pick that one.
00:59:04
Often what happens is that they're in
00:59:06
conflict. Your gut tells you to go with
00:59:08
job A and your reason analysis tells you
00:59:10
to go with job B. And now what we do is
00:59:12
we tell people go walk along the beach
00:59:15
and try to reconcile this conflict and
00:59:17
eventually it'll come to you.
00:59:19
The reality is, it can't.
00:59:22
Because you don't have it in you to
00:59:23
reconcile those because your gut can
00:59:26
never answer the question of how you
00:59:28
will feel about it tomorrow.
00:59:30
And your reasoned analysis can only tell
00:59:33
you how you should feel about it
00:59:35
tomorrow, not how you will feel about it
00:59:37
tomorrow.
00:59:38
And in that case, you need a third vital
00:59:41
piece of information before you actually
00:59:43
can make the choice.
00:59:45
And that's to look outside you rather
00:59:47
than to look inside.
00:59:49
To look at the people that chose job A
00:59:52
and chose job B.
00:59:55
And now do a reasoned analysis then you
00:59:58
do a reasoned analysis
01:00:00
to see why
01:00:02
they're happier in A or B, wherever they
01:00:05
happen to be happier.
01:00:07
You use your gut to tell you which one
01:00:09
you feel are happier. You use your
01:00:11
reasoned analysis to tell you to analyze
01:00:14
why they're feeling feeling happier in
01:00:16
whichever place.
01:00:17
And then you take that information to
01:00:19
help reconcile your conflict
01:00:22
about whether you should choose job A or
01:00:25
job B because wherever other people are
01:00:27
happy, chances are you will be too.
01:00:30
We're not that different.
