The Freedom of Choice

A tradeoff is inevitable in almost every decision we take, as we usually forego some opportunity or benefit in our choices.

Many people strive for everything and believe there are no tradeoffs.

Focussing on less can get you something but focusing on everything may get you nothing.

We seem to think that the people around us have everything in life.

Tradeoffs in others take time to become apparent. Everyone lets go of something, making a sacrifice, to be able to focus, investing time and energy in what is important to them.

When consumers are faced with many alternatives, they often experience choice overload that increases anxiety and hinders decision-making.

Consumers try to reduce this anxiety by selecting only a couple of criteria (say price and quantity) to determine the best value for money.

A decoy steers you in a particular direction while giving you the impression that you are making a rational, informed choice.

Consider the price of drinks at a well-known juice bar: a small (350 ml) size costs $6.10; the medium (450 ml) $7.10; and the large (610 ml) $7.50. The medium is a slightly better value than the small, and the large better still. The medium is designed to be the decoy, steering you to see the biggest drink as the best value for money.

If you buy the biggest, was it because you made a sensible choice, or have you been manipulated to opt for bigger than intended?

Sophisticated apps and social media only accelerate FOBO, giving us unlimited options. We are unable to decide due to a constant flow of new plans, events, invitations or commitments.

Maximisers compare everything before making a decision, setting very high standards and expectations for themselves.

They often feel disappointed with their final decision after making it.

1. Monumentalizing the Trivial. Place a limit on how long you're willing to spend addressing the issue. When the time ends, make your choice and move on.
2. Dredging Sunk Costs. Estimate how much the decision would take in total to follow through. If the cost is higher than the benefit, change your decision.
3. Drowning in Data. Identify less than 10 pieces of relevant data that will have a strong impact on your decision's outcome. Then forget everything else.
4. Do-or-Die Mentality. Realize that every decision is temporary. Use an overall decision-making strategy that stretches over time, not that imagines each moment to be the most critical one for the business.

The 2 systems of the brain that wok during decision making:

• System 1 is automatic and quick (like "something feeling off").
• System 2 is deliberate and slow (like an algorithm).

At times, these systems are at odds with each other, but research shows it's always best to trust an algorithm than your own gut.

There are a few biases they don't address:

• Narrow framing: the tendency to view an option as your only option.
• Confirmation bias: our tendency to gather the information that supports our preferred option.
• Short-term emotion: our tendency to have our judgment clouded when emotions run high.
• Overconfidence: our tendency to make a decision with too much optimism about how things will play out.

• With too many options, people increasingly rely on recommendation engines to help them cope with choice.
• We pay more for the same stuff. To watch the good things on TV now involves paying monthly subscriptions to many services, where once you only had to pay a TV license. 
• Privatization of companies leads to many companies offering the same service - but we still feel that we are possibly paying too much.
• Education becomes a consumer good.

The ideology of choice makes us forget that not all things should be bought and sold. Moreover, more choice does not increase our happiness, security, and contentment. It does leave us overwhelmed and anxious so that we often turn to denial and willful blindness.

At least we are thinking about choice and do not merely follow the whims of the market.

Overthinking becomes an endless cycle of thinking through options, researching it, and through the research finding even more things to think about. 

The uncertainty in this kind of thinking is what keeps us stuck in indecision.

We should always contemplate the pros and cons, take a step back from the action and get some perspective, see the big picture, consider the deeper Why of what we’re doing. But at some point, we have to say, “Enough!” And then take action.

These are some of the common ways we habitually deal with the uncertainty of a decision. But none of them solve the problem for us:

• Doing some research. 
• Writing out a pros and cons list.
• Asking a bunch of people about their opinion.
• Putting off the decision.

• What the best choice might be.
• Whether there will be negative consequences of the choice.
• Whether we’ll look dumb to others if we make the wrong choice.
• Whether we’ll feel dumb, or ripped off, and regret it for years to come.
• Whether we’ll be OK if we make the wrong choice.

Our working memory is what allows us to focus on the information we need to get things done at the moment we’re doing them. It is also in limited supply. You can think of it like our brain’s computer memory. Once it’s used up, nothing more can fit in.

When you overanalyze a situation, the repetitive thoughts, anxiety, and self-doubt decrease the amount of working memory you have available to complete challenging tasks, causing your productivity to plummet.

A recent Stanford study suggests that over-thinking not only impedes our ability to perform cognitive tasks but keeps us from reaching our creative potential as well.