When investing – or buying jam – too much choice can be a bad thing
As a species, we seem to value more choice, but having more options may leave us worse off than before
The investment world, much like the consumer world, contains a bewildering array of choices. We grew up believing that more choice is a good thing, but studies have shown this is not necessarily the case. Sheena Iyengar, a Columbia University professor of business and author of the book The Art of Choosing, shows how a large number of choices may even leave us worse off. Iyengar pioneered the famous jam test, where one group of customers in a supermarket was offered a small variety of flavours of jam to try, while another group was offered a large variety (customers who tried the jams were given vouchers to redeem on purchases of jam). Those customers offered a smaller variety were more likely to make a purchase than those faced with a larger variety. The greater the variety, the more anxious the customers became about making the wrong choice. Often they opted out of making any choice at all. Subsequent studies have shown similar results for investments and medical insurance. Faced ...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.