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Don’t let the “great” be the enemy of the “good” — Pop Economics

Don’t let the “great” be the enemy of the “good”

by Pop on March 20, 2011

Post image for Don’t let the “great” be the enemy of the “good”

Or, why I still haven’t bought a mattress

I’ve intended to buy a new mattress for, oh, about a year now. I’ve actually gone to Macy’s and lain down on probably 20 or so mattresses to figure out what I like and don’t like. I’ve looked at reviews of mattresses online, and at one point was pretty close to pulling the trigger.

But I haven’t. This is probably a 10-year investment, and I feel a lot of pressure to make the right choice. So instead I’ve continued to sleep on my too small, cheap Sealy that gets way too hot in summer and is surely less comfortable than even the least comfortable mattress I’ve tried out.

Even if there is a better mattress at a better price out there for me, getting a less-than-ideal mattress is better than the status quo. So why can’t I make a decision?

One problem might be that I simply have too many options to pick from.

In the mid-90s, Columbia professor Sheena Iyengar and Stanford’s Mark Lepper set up a tasting booth with jams at Draeger’s Supermarket in Menlo Park. One day, they set up a booth with a limited selection of six jams. Another day, they set up a booth with an extensive selection of 24 jams.

Customers could sample as many as they wanted, but on average, no matter which booth they encountered, they tried between one and two jams.

The stand with the extensive selection attracted more shoppers than the limited-selection booth, but the limited-selection booth was far more effective in getting people to purchase. In fact, while 30% of shoppers who tasted at the six-jam booth ended up buying a jar, only 3% of shoppers at the 24-jam booth bought one.

In a separate study, they had undergraduate psychology students watch Twelve Angry Men and gave them the option to complete an essay in response to it for extra credit. (The undergrads didn’t know they were part of a study. “Intro to Social Psych” students, take note!)

One group of students could choose from six essay topics. The second group chose from 30 topics. But while 74% of the six-topic students ended up completing the assignment, only 60% of the 30-topic students turned it in.

In both cases, you’d think that having a lot of choices would be viewed by the subjects as a good thing. Indeed, the test subjects reported enjoying making decisions more when they had more to choose from.

But having a lot of choices also made them think more about the consequences of making a “bad” choice or passing up potentially “better” options.

“Maybe jam #15 would taste even better than jam #7! Ah, I’ll just think about it and come back later.”

Don’t let “great” be the enemy of “good.”

There are several theories as to why we can’t make decisions when presented with too many choices. Some people think it’s not the presence of a lot of choices themselves, but the absence of information about the choices. Maybe if those jam-tasters had put all 24 jams in their mouths they wouldn’t have had a problem picking one.

Likewise, maybe it’s so hard to get people to invest because there are seemingly endless companies with which to open accounts and then even more mutual funds to choose from.

But here’s the thing. Investing in any mutual fund is probably going to be better than cash. Your simple stock/bond allocation matters much more than whether you choose the S&P 500 ETF or the S&P Value ETF.

Likewise, almost any mattress will be better than the cheap-o mattress I have. Those jam tasters, assuming they liked one of the jams they tried, would be happy eating it. And those college students who couldn’t pick from 30 topics would have gotten the extra credit had they picked any of them.

Here are some other common “enemy of the good” scenarios I see frequently from myself and others:

— Waiting for the perfect moment to ask for a raise.
— Waiting for the right economic climate or set of personal circumstances to start your own business.
— Waiting for the low-point of the market to start investing.
— Trying to find the perfect diet or workout regimen. In the meantime, continuing to eat ice cream and hot dogs.
— Looking for the right time to change careers and the perfect career to change to (assuming they’re unhappy in their current spot)

In all these scenarios, simply doing anything would probably lead to a better result than doing nothing.

Limit your choices to inspire action.

Let’s return briefly to my mattress problem—which my occasionally aching back and droopy eyelids can attest is all-too-real. What I should have done (and what I should do) is set a scope of research to carry out before making a decision.

So say I decided to visit three stores and then return to my favorite and buy it. Would I get the best mattress ever conceived by man? Probably not. But that’s enough testing to get me to a pretty darn good mattress without leaving endless possible Googling, review reading, and shopping.

In the same way, maybe you can set a deadline for yourself to ask for a raise. If the opportune time hasn’t arisen by, say, May 20th, just ask and get the ball rolling.

Anyway, if you have other ways to avoid decision paralysis, let’s hear them. My back will thank you.

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{ 11 comments… read them below or add one }

James March 20, 2011 at 7:24 pm

Here’s a tip you can use: buy a Tempur-Pedic mattress. There are very few options in their lineup so you will never feel like you picked the wrong one and you can be confident it is better than all of the conventional spring mattresses (because I said so.)

PS read the book, Paradox of Choice, if you enjoyed the above article as much as I did.

Rob Bennett March 21, 2011 at 11:22 am

Investing in any mutual fund is probably going to be better than cash.

I agree re the primary point of the blog post, Pop.

I don’t agree re the particular comment quoted above. The historical data shows that cash is likely to provide a higher long-term return when stocks are purchased at the sorts of prices that have applied from 1996 forward.

To tie this back to the primary theme, it might be that you don’t want to let the great be the enemy of the good but you DO want to be sure to distinguish what matters a lot from what doesn’t matter so much. Price might be one of those things that matters so much that you simply MUST take it into consideration.

I agree with the general point, though. My take is that more or us would take price into consideration if we didn’t waste so much time worrying about non-price factors that just don’t amount to much in the long run.

Rob

Jacq March 21, 2011 at 11:40 am

LOL – deja vu on the bed choices Pop!
http://singlemomrichmom.com/help-this-maximizer-spend-money-please/

FWIW, I went with the headboard in the pic and a gel mattress and am in all sorts of heaven every night. Even my kids steal some time in my bed when they can. And of course, once you get a new bed, have to get new sheets, new bedding… and I’m gearing up for gel pillows yet too. :-)

Janette March 21, 2011 at 11:41 am

I disagree with Rob. I ride the roller coaster close to the top and get out. If I miss the top and go to the bottom I do not get out when it is burning…My cash makes nothing.
I see the “too many choices” in the confusion of marriage and jobs for the 20-35 year old group. There seems to be “there has to be something better out there- I should not settle” menality. It is sad in so many ways because so many are just stuck by having too many choices.

Ed Mamula March 21, 2011 at 12:37 pm

Page 19 of “The Paradox of Choice” seems to reference the same 6 jams vs. 24 jams study that you mention.

Here is an interesting wrinkle though:

“In either case, the entire set of 24 varieties was available
for purchase. The large array of jams attracted more people to
the table than the small array, though in both cases people tasted
about the same number of jams on average. When it came to buying,
however, a huge difference became evident.”

The sampling choice was limited, but the buying choice was not. I’m not quite sure what this means, but I have a nagging feeling that there is something missing from the analysis that would conclude that “limited choice is better than unlimited choice”. Did the people who sampled the jam think that the 6 on display were “the best”, “the worst selling”, or neither? This information might change how I *choose* to interpret the results. :-)

Tara March 21, 2011 at 1:15 pm

As for the mattress, I would go to probably 3 stores, try out a bunch of mattresses, and then buy the one I liked the best out of those. I hate wasting tons of time researching every possible option and stressing myself out over a choice like that.

Norman March 21, 2011 at 4:13 pm

Great article.
I dropped cable TV last year and have not regretted it because I used to sit and waste SO much time flipping channels to find what I wanted to watch. By having less channel choice I find something to watch easier. When I had more channels I would flip back and forth between a couple of shows that I thought were good, now I’m more likely to pick one and stay on it.

krantcents March 22, 2011 at 7:15 pm

Is it too many choices or your current mattress is not bad enough to make you make a decision?

Mary March 23, 2011 at 6:29 pm

I do the same thing–I want new kitchen counters, but I can’t figure out what to do. There are tons of places I looked up, and I don’t know if I should go to Home Depot, or find a contractor, or find a stoneyard, and what order I’m supposed to do those things in and how much it would cost. And so I stick with the same countertops and look at my file of information. I need to set three steps, get’ em done, and replace the counters already!

Scott March 24, 2011 at 3:27 am

I think a Consumer Reports membership, at $25 a year, is great for precisely this sort of problem. I recently was in the market for a clothes washer and dryer set, and have used Consumer Reports in the past for car purchases. I also used it for treadmills.

These are all things where the choices out there are plentiful and the information available isn’t so clear – especially on washer and dryer sets, and treadmills. There are a lot of hidden costs on W&D sets especially.

It is easy to get disoriented with the choices and just throw your hands up in the air. Consumer Reports helps me pare down the choices to a more manageable set and then choose from there. I now own a used Corolla that I am very happy with, and a washer and dryer set that cost 1/3rd of the fancy front-loaders that have the reputation of being more efficient but are perhaps not as deserving.

Side note: those glossy red and blue front-loading washer and dryer sets, while gorgeous, have become something of a status symbol. How odd that something so utilitarian is now a marker of people with more money than sense!

Tommy April 12, 2011 at 6:46 pm

Regarding the study of 6 jams v 24 jams: here is a grocery store (Trader Joe’s) that takes the conclusion of the study and extends it to an entire store.

http://money.cnn.com/2010/08/20/news/companies/inside_trader_joes_full_version.fortune/index.htm

It’s a pretty interesting article both in relation to the topic you’re writing about as well as in general.

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