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Behavioural Economics - What is Choice Overload?

Level:
AS, A-Level, IB
Board:
AQA, Edexcel, OCR, IB, Eduqas, WJEC

Last updated 7 Jan 2023

Choice overload refers to the behavioural phenomenon in which having too many options can actually make it more difficult to make a decision.

When confronted with a large array of choices, people may feel overwhelmed and may have difficulty selecting the best option. This can lead to decision paralysis, where people are unable to make any choice at all.

Here are a few examples of choice overload:

  • Online shopping: When shopping online, consumers are often presented with a vast array of options, which can make it difficult to choose the best product.
  • Investment choices: Investors may feel overwhelmed when presented with a large number of investment options, such as mutual funds, stocks, and bonds.
  • Menu selection: When dining out, people may feel overwhelmed by a long menu with many options, making it difficult to choose what to order.
  • University and course selection: Students may feel overwhelmed when trying to choose a university degree, as there are often many options to choose from.

To avoid choice overload, it can be helpful to set clear criteria for making a decision, limit the number of options, or seek advice from a trusted source.

Many consumers fall back on using heuristics when facing choice overload especially when decisions involve having to absorb lots of complex information.

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