Can choice be bad for us?
Chris seems to think so, since heavy television viewers can become unhappier if they have more channels available. Fair enough, and you might think such sentiment undermines the economic liberalism that creates such a plethora of cable channels. But you'd be wrong!
When I refer to "choice", I'm not really referring to a crude list of options - such as a number of television channels - and claiming that more-is-better. I'm saying that choice is good, whether we're choosing to enlarge our menu of options, or reduce it. If you're someone who's become unhappier as a consequence of having too many channels, you can choose to buy a smaller package. You can choose to switch off. You can even turn it to your advantage - having less means having more.
That's why department stores exist - to reduce the transaction costs of choice. Choosing to restrict our choices is what makes the ability to choose so important.
A free market isn't about increasing the amount of choices we face, it's about having the freedom to choose when we want more options, and when we want to restrict them. Isn't that what being Free to Choose is all about? Call it "meta-choice".
We have to distinguish 2 issues:
1. Is choice a good thing in itself? I agree - it is.
2. Does choice lead to greater subjective wellbeing? The point of my post was to show that sometimes (only sometimes) it isn't.
I'd add another thing. Sometimes, the way in which choices are presented can distort our decision-making - the framing heuristic. A great example is this paper: http://gsbwww.uchicago.edu/fac/richard.thaler/research/91010079.pdf&e=14905&ei=wfACRZjVK7yQiALe1_26CQ&sig=__4gDmYVwYP_6dMUbNe42EHOqxW4Y=
You could argue that framing is a consequence of limited choice. But you could also argue that it's an effect of increasing choice. For example, in the Thaler paper, increasing choice of bond funds would skew investment wrongly towards bonds.
Posted by: chris | September 09, 2006 at 05:57 PM
I think point 2 only really holds with a "crude list of options" approach, since that's the only way to measure choice.
I guess I'm saying that a choice between 100 satellite channels or the radio, is more of a choice than between 200 satellite channels.
Therefore it's consistant to say that (a) subjective wellbeing might deteriorate in light of an increasing menu of choices; but also (b) that doesn't capture the fact that it's types of choice that drive prosperity.
Posted by: AJE | September 09, 2006 at 07:44 PM
Interesting point. But
"A free market isn't about increasing the amount of choices we face, having the freedom to choose when we want more options, and when we want to restrict them"
- I don't think this can be true. Trivial counter-example: I don't get to choose how many brands of toothpaste there are on the shelves at my local supermarket (answer, roughly 43).
Meta-choices are often necessarily collective decisions - we don't each get our own menu of choices even in consumer decisions, and consumer decisions are the most individual parts of our lives.
Posted by: Tom | September 09, 2006 at 09:51 PM
In fact, even the choice of channels is not an independent choice. Here (Ontario) the local cable monopoly offers cable "packages" which provide sets of about 10 channels at once.
Then there are negotiations among household members - if you get the pop music channel for the teenager then you also get along with it various other channels that no one wants (most of the time). The design of the system is intended, of course, to get households to oversubscribe.
Posted by: tom s. | September 09, 2006 at 10:15 PM
Thanks for the comments Tom. The point I was trying to make was that you don't have to buy toothpaste from your local supermarket. If 43 types is too much for you, you can buy toothpaste from a shop that provides less choice. You *do* have that choice. No one forces you to spend all day agonising over which particular brand to buy.
Consumer decisions aren't geniunely collective choices because you have the choice to opt out - and that's the choice that's important, not how many types of toothpaste are on offer.
Posted by: AJE | September 10, 2006 at 02:45 PM