The Paradox of Choice (Ecco, 2004) is the title of a new book by Swarthmore’s Barry Schwartz who argues too much choice can be a bad thing. While Schwartz focuses on the scope of consumer choice, a colleague asked me if his argument can be applied to the scope of policy alternatives. Can there be too many policy alternatives? Some of my more extended thoughts on this appear below, but short answer is — Perhaps. But in many cases, policy making clearly suffers from a dearth, not an excess, of choice.

Some subtle qualifications are important here. First, to say more choice is a bad thing overstates Schwartz’s argument. While he may believe this, his own research indicates greater scope of choice has the largest negative affect on people who seek to maximize their decision outcomes, people who simply seek to make a good enough decision (called satisficers) are less affected by plentiful options.

Second, other research suggests economic benefits result from greater choice. For example, in yesterday’s New York Times, Virginia Postrel asserts (registration required), “More and more economic value seems to be coming from giving consumers greater choice, off-line as well as online. Yet these intangible benefits, which represent real increases in the standard of living, are not picked up in most economic measures.”

Postrel bases this assertion on a recent study in Management Science by MITs Erik Brynjolfsson and colleagues that concludes:

“While efficiency gains from increased competition significantly enhance consumer surplus, for instance, by leading to lower average selling prices, our present research shows that increased product variety made available through electronic markets can be a significantly larger source of consumer surplus gains.”

So, it seems that the value of scope of choice is a function of the decision context, specifically the nature of the decision maker and the metric used to evaluate value.

I am not aware of any scholarship in policy that seeks to evaluate the role of scope of choice in terms of decision context or outcomes. However, from my own work in science and technology policies, I can cite at least two areas where decision making has suffered due to a lack of choice: space policy and climate policy.

As my colleague Rad Byerly has observed in his work, space policies have suffered from a lack of diversity in discussions of policy alternatives. Over the past three decades, a lack of options may be one reason why NASA finds where it is today.

And if climate policy is on a road to somewhere, then right now it is trapped in a cul-de-sac, because the options that will in the long run make the most difference are not presently playing much role in public and scientific debate.

Often we take policy alternatives as given. But they do come from somewhere, and some are better than others. Arguably, in many cases more effective options are not part of policy debate, which suggests that an expansion of the scope of choice might contribute to better outcomes. Unlike in consumer decision making, evaluations of appropriate scope of choice in policy decision making do not appear to have occupied the attention of policy scholars, even as they have devoted considerable attention to ”agenda setting”. But perhaps they should.

References:

Brynjolfsson, Erik, Michael D. Smith, and Yu (Jeffrey) Hu, November 2003. “Consumer Surplus in the Digital Economy: Estimating the Value of Increased Product Variety at Online Booksellers” Management Science, 49:1580-1596.

Schwartz, B. 2002. Maximizing versus satisficing: Happiness is a matter of choice. Journal of Personality and Social Psychology, 83:1178–1197.

Schwartz, B. 2000. Self-determination: The tyranny of freedom. American
Psychologist, 55:79-88.