I watched a ‘TED Talk’ by author & psychologist Barry Schwartz on the ‘paradox of choice‘. He explained why too much choice can make us less happy than we would be if we had fewer choices. This is because with many choices we 1) have more regrets about our choices, 2) feel the loss of the ‘opportunity cost’ of the options we don’t choose, 3) expect more from the choice we make, and thus are more frequently disappointed, and 4) blame ourselves when we’re disappointed, since, with so much choice, we have no one to blame but ourselves if we make a bad decision.
Check out the video for more on this reasoning. Schwartz’s arguments are a stark departure from the usual line of reasoning in American/libertarian thought which argues that more personal liberty and freedom equals more choices (and vice versa), and hence greater societal welfare.
As Schwartz argues, and as empirical ‘happiness‘ studies have shown, this appears to be false for prosperous societies like ours. While choice is wonderful up to a point, too much of it can be bad for us. (Unlike poorer or dictatorial societies whose problem is not enough choice.) Studies suggest that, despite the proliferation in material & social gains, human happiness has not increased in the United States since 1950.
I wanted to share my own thoughts (warning: this is an ‘opinion’ piece!) on this, and provide some personal recommendations on how to minimize the harmful effects of too much choice.
Simplify: less things, more experiences
Take a page out of Thoreau’s book ‘Walden’ and voluntarily cut down on choice by simplifying your life. Reducing the things that absorb your time and energy let you focus on what really matters to you. Consider limiting your exposure to TV and internet advertising and to shopping malls. They increase your material options for things that probably won’t make you much happier after owning them for a couple months.
Experiences, on the other hand, increase in value over time. Spend money & time acquiring good memories instead of a house full of things. Spending less and saving more means you can take more time off to spend time with friends and family, or to travel or engage in productive hobbies. Or, provide more choices for those who WILL benefit from them by contributing charitably to poor nations.
The secret to happiness
Simplification notwithstanding, there are obviously many benefits to choice. Being able to decide whom to marry, how many children to have, what job to work at, where to live, etc allow people to pick and choose the things that they believe will make them the happiest (within the range of their ability to attain these things.) One of the problems with all of the great choices we have (think food, electronics, cars), is that people’s expectations have increased along with their improved options. There’s much truth to Schwartz’s statement that ‘the secret to happiness is low expectations.’
To me, I think of this as a difference between absolute and relative value. The standard economic model of human behavior is that humans care about absolute value, or how much stuff/money/time/pleasure we have on a zero to infinity scale. Thus, if you can choose between 25 different digital music players, and can select the one with the most valuable features, you’re better off than only being able to pick from 2 players with less gadgets.
However, what humans also care about is how things match up to their expectations. If you already expect your digital music players to do 10 things, and the new player does 11 things, you may only feel ‘1 thing’ better, but not 11 things better. This may be easier to see in how people feel about their jobs.
Folks in the western world have more purchasing power, work less hours in more comfortable surroundings, and have more free time than any generation before us. Despite this, many of us still hate our jobs, even though, on an absolute scale, we’re way better off than even our parents’ generation. (Read ‘The Progress Paradox‘ if you don’t believe the last part of that sentence.) A big reason for this is because we’ve come to expect certain characteristics in our jobs. We measure our happiness by how much our job meets, exceeds or fails to exceed the things we take for granted. (Like leisure time, health benefits, wages that allow us to live in large houses, own multiple cars, and never go hungry.) If this is true, how do we learn to appreciate the ‘absolute’ value in the objectively luxurious (by historical standards) lifestyle we live?
Be appreciative at every opportunity
One way is to be actively conscious of how fortunate we are, and to remind ourselves of the good things in our lives (rather than constantly grouse about the negatives, something humans are particularly skilled at.) For example, the next time you’re at the grocery store complaining about the unripe bananas in January, remind yourself of how amazing it is that we have access to cheap, out-of-season produce every day of the year.
Being appreciative is also important when confronted with even better versions of the stuff we already have. Some of the happiness literature (cited above) suggests that envy is responsible for part of our failure to enjoy the immense material wealth that’s been created over the last 60 years. When your neighbor gets a new BMW, your own Toyota Corolla doesn’t look so great in comparison. (Never mind that your car has excellent comfort, performance and safety features, especially when compared to cars of just a few decades ago, or the fact that you were perfectly happy before your neighbor’s purchase.)
Be appreciative of people as well. Complimenting those around you for what they do increases your happiness as well as theirs. (Psychologists have shown this empirically; people who are more appreciative are happier than those who aren’t.) It’s easy to take the nice things a spouse or friend does for you for granted. Be mindful of when someone is doing something beneficial for you, and praise/reciprocate accordingly.
Be appreciative of random chance (or Providence, depending on your viewpoint) and remember all the good luck you receive, and try not to dwell on the bad. Everyone can bring to mind the last time they were stuck in grinding traffic, but what about the last time your commute was a breeze for some inexplicable reason? Did you remind yourself how fortunate you were at that moment?
Don’t be too hard on yourself
While I believe that people should hold themselves to high ethical and behavioral standards, I also think people beat themselves up over things that, when put in perspective, are actually quite trivial. Even if you make a big mistake, it doesn’t make anything better to simply feel guilty about it. Focus on the future instead: repair the damage if you can, cope with it if you can’t, and consider if you need to take preventative action going forward.
I know someone who has been agonizing about leaving a job they don’t like, mostly because they’ve invested a lot of time and effort into this career path. They spent a lot on school to receive a specialized degree to go into this field. They spent several years gaining experience on the job. This person dislikes the job, but feels guilty about quitting because they’ve put so much into it.
The bottom line is, they can’t get back the time and money they spent for their current profession, so there’s no point in feeling bad about it. Instead, they should focus on answering questions that matter like: will it make me happier to leave this career for a new one? (Yes!) How can I find a new career and avoid making similar mistakes in my next job? Note that these questions deal with the controllable future, not the uncontrollable past.
Worry about what you can control, steel yourself against for the rest
This last suggestion is particularly apt to investing and my point about letting bad luck go. In investing, the best you can do is make smart choices in the present with respect to your goals and needs. For most people, low-fee stock index funds are the way to invest for distant goals, like retirement. If you have $100,000 in such a fund for a retirement that’s 20 years away, and the fund drops by 25% the next day, should you feel remorse for your decision? No! When uncertainty is involved, rationally expected results should determine how you evaluate your decision-making, not actual results. To see why this is true, imagine the following gambling scenario:
Multi-billionaire Bill Gates offers you the following proposition: You’ll flip a quarter, and if it comes up heads, you get $2 from Gates. If it’s tails, you pay him $1. Do you accept this flip? (Make the decision in your head for the purposes of this thought experiment.)
Now ask yourself: if the coin comes down tails (you lose $1), does that mean you made a bad decision (before the flip occurred)?
Assuming your goal in this scenario is to make money, the answer to the first question is ‘yes, take the flip’ and the answer to the second question is ‘no, you made a good decision even though you lost.’ Let’s see why: 50% of the time, you win $2, the other 50% loses you $1, for a net average gain of $1 (= 2 – 1) for every two flips. This is a positive ‘expectation’ (average result) of 50 cents per single flip. With each flip you ‘expect’ to win 50 cents on average, so ‘yes’ you want to flip.
If the coin comes down tails, losing you a buck, did that change your expectation before the flip? Of course not, you still had a 50 cent expectation. Thus, even though you lost, you made the right decision in terms of maximizing your expected profit. Similarly, your expectation for future flips is still a positive 50 cents, so you should offer to keep playing with Bill no matter how many times you lose (or win.) (If you can flip fast enough and/or get Bill to raise the stakes, you’ll eventually bust one of the richest men in the world.)
This example can be applied to life, albeit with less clarity. If you made a decision that seemed like a good one based on your rational evaluation of the information you could get, that’s the best you can do. In the investing example, since market movements are impossible to predict with any accuracy (run from, or punch, anyone who tells you otherwise), there’s no point in kicking yourself if the market dives unexpectedly. (The same goes for congratulating yourself on your wise intelligence if the market soars.)
Instead, be emotionally prepared to cope with the misfortune that is sure to come to everyone in greater or smaller amounts in life. Counting the positive things in your life will help. (I remind myself of my wonderful wife, friends, family, ridiculously good looks, and the existence of microbrewed beer whenever I’m feeling down.)
If your decisions repeatedly turn out badly, you should reexamine your thought process to make sure you’re really making rational decisions based on good information. (This is because similar repeated outcomes suggest that luck is not the reason for them.) Ask your friends or family to check your logic. They should be quick to tell you if, say, you’ve dated obvious jerks in your last three relationships and need to stop kidding yourself about your ‘bad luck’ with love.
I’d love to hear comments from folks on how they’ve dealt with choice, and their thoughts on what I’ve written above. Good luck implementing the above in your own life!