The Paradox of Choice

It seems to be a fairly general principle that when making choices among alternatives that involve a certain amount of risk or uncertainty, we prefer a small, sure gain to a larger, uncertain one. Most of us, for example, will choose a sure $100 over a coin flip (a fifty-fifty chance) that determines whether we win $200 or nothing. When the possibilities involve losses, however, we will risk a large loss to avoid a smaller one. For example, we will choose a coin flip that determines whether we lose $200 or nothing over a sure loss of $100.

A more optimistic view of this last result is that the process of analyzing a relationship actually produces insight, so that we better understand the true nature of our relationship. But the evidence suggests otherwise. When students who had been asked to analyze their relationships were compared to students not asked to do so, the researchers found that unanalyzed attitudes about the relationship were a better predictor of whether the relationship would still be intact months later than analyzed attitudes. Those

There is an important lesson to be taken from this research on counterfactual thinking, and it’s not that we should stop doing it; counterfactual thinking is a powerful intellectual tool. The lesson is that we should try to do more downward counterfactual thinking. While upward counterfactual thinking may inspire us to do better the next time, downward counterfactual thinking may induce us to be grateful for how well we did this time. The right balance of upward and downward counterfactual thinking may enable us to avoid spiraling into a state of misery while at the same time inspiring us to improve our performance.

IN WHAT IS PERHAPS THE MOST FAMOUS EXAMPLE OF HEDONIC ADAPTATION, respondents were asked to rate their happiness on a 5-point scale. Some of them had won between $50,000 and $1 million in state lotteries within the last year. Others had become paraplegic or quadriplegic as a result of accidents. Not surprisingly, the lottery winners were happier than those who had become paralyzed. What is surprising, though, is that the lottery winners were no happier than people in general. And what is even more surprising is that the accident victims, while somewhat less happy than people in general, still judged themselves to be happy.

be. But as time passes, and the winners and the accident victims get used to their new circumstances, the “hedonic thermometers” in both groups begin to converge, becoming much more like the population at large.

The result of having pleasure turn into comfort is disappointment, and the disappointment will be especially severe when the goods we are consuming are “durable” goods, such as cars, houses, stereo systems, elegant clothes, jewelry, and computers. When the brief period of real enthusiasm and pleasure wanes, people still have these things around them—as a constant reminder that consumption isn’t all it’s cracked up to be, that expectations are not matched by reality. And as a society’s affluence grows, consumption shifts increasingly to expensive, durable goods, with the result that disappointment with consumption increases.

Individuals who experience gratitude are more alert, enthusiastic, and energetic than those who do not, and they are more likely to achieve personal goals.

There are some strategies you can use to help you avoid the disappointment that comes from thinking about opportunity costs: Unless you’re truly dissatisfied, stick with what you always buy. Don’t be tempted by “new and improved.” Don’t “scratch” unless there’s an “itch.” And don’t worry that if you do this, you’ll miss out on all the new things the world has to offer.

2. Every morning, when you wake up, or every night, when you go to bed, use the notepad to list five things that happened the day before that you’re grateful for. These objects of gratitude occasionally will be big (a job promotion, a great first date), but most of the time, they will be small (sunlight streaming in through the bedroom window, a kind word from a friend, a piece of swordfish cooked just the way you like it, an informative article in a magazine).

3. You will probably feel a little silly and even self-conscious when you start doing this. But if you keep it up, you will find that it gets easier and easier, more and more natural. You also may find yourself discovering many things to be grateful for on even the most ordinary of days. Finally, you may find yourself feeling better and better about your life as it is, and less and less driven to find the “new and improved” products and activities that will enhance it.

We can mitigate regret by Adopting the standards of a satisficer rather than a maximizer. Reducing the number of options we consider before making a decision. Practicing gratitude for what is good in a decision rather than focusing on our disappointments with what is bad.

So, to be better prepared for, and less disappointed by adaptation: As you buy your new car, acknowledge that the thrill won’t be quite the same two months after you own it. Spend less time looking for the perfect thing (maximizing), so that you won’t have huge search costs to be “amortized” against the satisfaction you derive from what you actually choose. Remind yourself of how good things actually are instead of focusing on how they’re less good than they were at first.