New research developed by Elena Reutskaja, an Associate Professor of Marketing at IESE Business School and colleagues from other universities uncover how human brains work when having to make a choice among an array of different options. For example, how, when doing our shopping, we choose from 25 or 30 different types of milk or 50 varieties of ice-cream.
The research, published on Monday in Nature Human Behaviour, shows that although the human brain finds the concept of choice – or even an abundance of choice – attractive, too many options make it difficult for the brain to process, evaluate and compare these choices. This phenomenon is called choice overload and it explains why we often walk away from a well-stocked shop or supermarket empty-handed.
Reutskaja says: “In Western cultures we like to have choice, we enjoy freedom and choice makes us feel that we are in control of our decisions.”
Beyond a certain point, however, that choice becomes overwhelming and decision-making is impaired.
“If given too many alternatives people can delay decisions, and this might have serious consequences. For example, when a person must undergo medical treatment but has to choose where to do it from a set of different hospitals. The decision might be delayed as a consequence, which could mean putting their health at risk.”
These findings have implications for a broad spectrum of sectors and fields: from businesses (retail) and policy-making (pension schemes), to web design (how to present many options on the screen), education (choosing a school for your kid) and healthcare (choosing hospitals on the NHS website).
The Human Brain at Work
The paper, “Choice overload reduces neural signatures of choice set value in dorsal striatum and anterior cingulate cortex,” examines the processes that happen in the human brain when it assesses different sets of options.
The researchers found that the brain made “mini calculations” weighing potential rewards against the costs of having to choose from these options – costs being the time and energy spent choosing A over B.
“We found that activity in some areas of the brain reflect the “cost of choice”. These costs increase with the number of options and so does the activity in those areas, “Reutskaja explains.
Reutskaja and her colleagues used MRI scanners to study brain activity of people choosing from different-sized assortments. They found two regions that encode choice overload: the anterior cingulate cortex (ACC), where the potential costs and benefits of decisions are weighed, and the striatum, a part of the brain responsible for determining reward. They found that both areas were more active when presented with an “intermediate” number of choices.
Participants were given sets of 6, 12 and 24 options. The researchers observed that for both sets of 6 and 24, brain activity in striatum and ACC was lower than when given 12 options.
“Too few or too many choices generate less value for people than sets with an intermediate number of options – in this case, 12. These medium-sized sets, however, have enough variety to satisfy our needs but they are not too “costly” for our decision-making process,” explains Reutskaja. “12 is not a magic number though. An optimal number of choices for our brain depends on many factors such as the context, personal characteristics, type of products we choose and so on.”
Critically, the researchers found that when a preferred alternative was added to the choice set, the human brain was automatically able to handle more alternatives and not feel overwhelmed. This suggests that even when confronted with too many options, decision-making can still be simplified.
Reutskaja and colleagues’ research offers new and important insights into the internal mechanisms that are activated during decision-making.
It clearly points to the importance of capping the number of options available in terms of the perceived value to the decision-maker.
Only a starting point
Prior research into choice overload has traditionally been undertaken using participant surveys and self-reporting mechanisms.
This new paper leverages inter-disciplinary collaboration, incorporating neuroscientific methodology, to shed greater light on the complex neural processes involved in decision-making and opens the door to future research in this fascinating area. For business leaders, public sector leaders and policy-makers, these findings will have real value in terms of optimising services and offerings.
About the authors
The paper titled “Choice overload reduces neural signatures of choice set value in dorsal striatum and anterior cingulate cortex,” was written by IESE Business School Associate Professor of Marketing Elena Reutskaja; Colin Camerer, the Robert Kirby Professor of Behavioral Finance and Economics at the California Institute of Technology; Axel Lindner, Group Leader of the Neurobiology of Decision Lab, Hertie Institute for Clinical Brain Research; Rosemarie Nagel, an ICREA Research Professor at Universitat Pompeu Fabra and Barcelona GSE Research; Professor; and Richard A. Andersen, the James G. Boswell Professor of Neuroscience at California Institute of Technology.