Choice Overload: When More Options Make Things Worse

Why having too many options can lead people to delay decisions or choose badly, the famous jam study, and how choices can be simplified.

Standard economic theory assumes more choice is always better: if you have more options, you can pick the one that suits you best. Behavioural research suggests that, in some situations, too many choices can backfire. This is called choice overload.

The jam study

In a famous 2000 study, psychologists Sheena Iyengar and Mark Lepper set up a tasting stand in a supermarket. On some days it offered 24 varieties of jam; on others, 6. The larger display attracted more visitors, but shoppers who saw 6 varieties were far more likely to buy a jar. Too many options seemed to discourage a decision.

Later studies found the effect is not universal. A review of many experiments found choice overload happens in some situations but not others, depending on how complex the choices are and how clear people’s preferences are.

Real-world examples

Retirement plans: research by Iyengar and colleagues found that when employers offered more investment funds in retirement plans, participation tended to fall slightly.
Insurance plans: people facing many complex health insurance options often choose plans that are worse for them.
Mobile phone and utility tariffs: complex options make comparison hard, and many people stay on expensive plans.

Why it happens

Comparing many options takes time and mental effort.
People fear making the wrong choice and regretting it.
Complex options make it hard to know which is best.

A simpler retirement menu

An employer offers 50 investment funds. Many employees, unsure which to pick, put off joining. The employer then offers a simple default fund plus a short list of alternatives. More employees join, and most choose the default. Simplifying the menu helped more people save.

Designing better choices

Ways to reduce choice overload include offering fewer, clearly different options, providing good defaults, organising options into categories and giving clear comparisons.

Thinking fewer choices are always better

Choice matters: people have different needs, and limiting options too much can leave people worse off. The goal is well-organised, understandable choice, not simply fewer options.

Key takeaways

Choice overload occurs when too many options discourage or worsen decisions.
The famous jam study found fewer options led to more purchases.
The effect depends on how complex choices are and how clear preferences are.
Good defaults and well-organised options help people choose well.