Saturday, May 13, 2006

The Paradox of Choice

This is a great video, especially since the material is fascinating (unfortunately, the cartoons he shows are copyrighted, so the video omits them, which makes it very annoying when the audience is laughing at a cartoon and you don't get to see it!). Basically, humans have several reactions when confronted with too many choices. One possible reaction is paralysis, which explains why many people don't sign up for 401(k) plans --- they don't know which fund to choose so they end up doing nothing. Another possible reaction is to spend a lot of time going through the choices in an attempt to maxmize satisfaction but in the end being disappointed, since if there are 200 choices and you're less than perfectly happy with your choice then it must be your fault. Finally, the fact that you have so many choices can make you devalue all of them.

This does seem ironic, since choice is an incredibly positive thing. My personal solution is to make a decision appropriately, and then not spend any time reflecting on its goodness or badness other than to learn what I can from it. You can't live life as one regret after another, or you'll have a very sad life. If you question all your past decisions all the time, you're not going to be very productive, either.

Finally, this video also explains why people hire agents: even though many agents are corrupt, have other conflicts of interests, or simply incompetent, for a lot of people, having an agent make the agonizing decision for you eliminates the unhappy feelings they have about making the decision themselves.
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