The Paradox of Choice - Barry Schwartz

Subtitled: Why More is Less. How the Culture of Abundance Robs Us of Satisfaction. I heard Barry Schwartz speak at Brand ManageCamp '07 in Chicago this past September and was so impressed with his presentation I immediately ordered the book. It's taken me awhile to get to it, but it was worth it. There are so many wonderful concepts put forth here, backed up by excellent research and anecdotal illustrations. It's a very engaging book and his writing style makes it very easy to read. There are some similar threads and research in this book that also appear in Stumbling on Happiness (Mar. 08) and The Wisdom of Crowds (Dec. 07).

One of the most memorable and important of his theses is dividing people into those who are maximizers and those who are satisficers. They are fairly self explanatory labels but the book does an excellent job of giving examples of the types of behaviors exhibited by both. Maximizers tend to experience anxiety in the process of making choices: they are constantly assessing the "best" of the choices, sometimes paralyzed by considering the options both real and imagined, and often less satisfied with what they choose because of constantly considering all the options that weren't chosen. Satisficers on the other hand decide what is "good enough" and make their choices based on that standard and then move on. It's not that satisficers have lower or lesser standards, only that they can make a choice that meets the standard they have set and move forward without second guessing or regretting all the choices that were rejected.

When you grasp these concepts, suddenly you can see these behaviors everywhere. I spent a long weekend in Boston with two long-time friends from high school. I was explaining the book and this particular concept to both Stu and Wayne, who immediately assessed where they were on this spectrum. And it is a spectrum of behavior. Stu is on the maximizer end, I am on the satisficer end and Wayne was somewhere on the spectrum closer to satisficer than maximizer. But as we went through our 4 days together deciding what to do, where to go, what to eat, we were suddenly hyper aware of how we made choices and how that affected our level of satisfaction with the outcome. Being self aware of how we make decisions is key to understanding why we feel the way we do about the results.

Schwartz takes the position that we are overwhelmed with decisions both large and small on a daily basis. The number of choices we are faced with every day is vastly greater than what our parents or grandparents had to face: cellphone plans, 401(k) plans, paper or plastic, smoking or non-smoking, credit or debit, fixed rate or adjustable rate, the warranty plan or not, upgrade to first class, and hey would you like to super size that? We tend to assume that more choice and more autonomy makes us happier. But the research and statistics say otherwise. In countries around the world, the increase in material wealth and standard of living has not made people happier. In fact, the rate of depression and suicide has risen sharply in recent decades in countries like the United States.

Some of this is due to a difference in objective well being and subjective well being. Objectively, it's easy to measure that we have more of everything - food, medical care, better housing, education, transportation, technology. But subjectively, those things don't make us feel better. All the time saving devices in the world from dishwashers to computers have not made us feel that our quality of life is better, or that we are somehow happier than our grandparents were.

The book is quite fascinating and I got a lot out of it. The final chapter is suggestions on how to tackle this overwhelming amount of choice and sort out what is worth expending time and energy in deciding, and what is not. Maximizers tend to apply the same of amount of time and energy into choosing just the right coffee maker that they do in buying a car. Somethings are not worth the investment of that kind of time, energy and anxiety. We need to adopt different behaviors for the times in which we live and that's really what this book is all about. I highly recommend it.

The Wisdom of Crowds - James Surowiecki

This is such a great book and so very timely! Originally published in 2004 and this edition in paperback having come out in 2005, the information is as timely in 2008 as it was when written. Of great interest to me is the amount of space at the very end of the book that is given to the stock market and the political process.

The main thesis of the book is that the collective opinion of any crowd, when averaged out, is more accurate and far wiser than the most intelligent individuals within that group. Time and again research supports this assertion statistically, and there are studies and examples throughout the book that illustrate how collective decision making has both triumphed and failed.

Central to the collective wisdom of any group is diversity. No matter how small the group, no matter what the task, diversity is key. Even the least knowledgeable and inexperienced individuals in a crowd bring much needed perspective and balance to the whole. James Surowiecki, the book's author and a New Yorker business columnist, points out that this concept is counter intuitive to what we believe about intelligence and the decision making process. This is why often it is not employed in situations where it could prove to be most helpful. Corporations are a great example of how decision making tends to be placed in the hands of an elite few, and the people on the front lines and those closer to the product or service are not involved in decision making. This leads to a poorer quality of decision than might otherwise have been reached had all opinions been taken into consideration and then averaged out.

This is an enjoyable and engaging book. Even the chapters with material that was quite foreign to me - like betting and point spreads - I was able to grasp and understand. It's also one of the best tutorials I've ever read on how the stock market functions, particularly how bubbles form and then bust. I highly recommend the book and can't think of any organization or group that would not benefit from understanding the wisdom of crowds.