Recently, a new study has revealed that people get bogged down and frustrated when given lots of options or choice overload while purchasing any good or services, which might lead them to poor decisions.
Economists call that problem choice overload, and the frustration it causes can lead to poor decisions.
Tibor Besedes, an associate professor in the School of Economics at the Georgia Institute of Technology, said that standard economic theory will tell that more choice was always better and theoretically, that works out, but when it comes to apply it, that's very different.
To help people make better choices when confronted by a large number of options, researchers have studied two decision-making strategies that break down the options into smaller groups that can be evaluated more effectively. One approach, analogous to a sports tournament, increased by 50 percent the likelihood that volunteer study subjects would make the best choice.
The results of the study could be applicable to a wide range of decisions in which many options must be considered, Besedes said. While the initial focus was on choosing prescription drug plans, the approaches studied could be used for choosing retirement programs, health care insurance, automobiles, homes, cell phones and other products or services with many choices.
The study is published in the journal The Review of Economics and Statistics, published by MIT Press.