How much choice is "good enough"? Moderators of information and choice overload

In today’s world, people face an abundance of information and a great number of choices both in important domains, such as health care, retirement, and education, and in less important domains, such as the choice of breakfast cereal or chocolate. Choice overload and information overload have strong negative effects on many important decision- making aspects such as processing and using information, the motivation to act, the quality of choices, and post- choice feelings, which are discussed in Chapter 43 in this volume in more detail. However, small choice and information sets are not always optimal either. Several variables– – such as information usage, decision accuracy, motivation to choose, and satisfaction with choice are “inverted- U” functions of the amount of information and the number of choice alternatives available. In other words, choosing from sets of an intermediate size usually brings more net benefits to the decision maker than choosing from large or small choice sets (Grant & Schwartz, 2011; Reutskaja & Hogarth, 2009; Shah & Wolford, 2007). Indeed, in line with the assumptions of bounded rationality, intermediate sizes are preferable when they do not entail the same high, cognitively unmanageable load that large sets do, and simultaneously possess the benefits of variety that small sets lack. However, exactly how much choice is enough, or, as Herbert A. Simon would say, “good enough”? The size of the intermediate set is not always clear or universal, and is often influenced by a variety of factors. The aim of this chapter is to set out the factors which most affect and moderate the experience of too much choice, influencing feelings of how much is “enough.” Broadly, there are two categories of moderators: one pertaining to the choice environment and one pertaining to the characteristics of the decision making actor. This division is in line with Simon’s scissors analogy (Simon, 1990), which views bounded rationality as the interplay between the two blades: the context or choice environment, on the one hand, and the capabilities and characteristics of decision makers ,on the other.