Published: Aug 28, 2006
We’re thrilled that Professor Barry Schwartz will be presenting the Closing Plenary at the upcoming User Interface 11 Conference. Our first introduction to Barry was when we read his bestselling book, The Paradox of Choice. We were impressed by Barry’s clarity when describing the forces that affect customers and shape the way designers should offer choices in the market. Barry is a leading authority on the ways that business, economics and psychology intersect.
UIE’s Jared M. Spool recently had the chance to talk with Barry about his research on how people make choices. You can listen to the podcast of the interview on the Brain Sparks blog. Here’s the transcript of the interview:
Jared M. Spool: So we’re talking today with Barry Schwartz, who’s the author of "The Paradox of Choice, and professor at Swarthmore College. Welcome, Barry.
Barry Schwartz: Hi.
Jared: Hi. I’m curious, how did you get interested in this topic? How did this all sort of start?
Barry: Well, there’s a short and a long answer to that. The short answer is that I went to buy a pair of jeans, and if you’ve read my book, that’s how my book begins. That used to be a 40 second affair. I just walked in, told them my size, and walked out with the jeans, that turned into an hour-long ordeal because I told them my size, they then asked me which of a dozen styles I wanted, and that, of course, required that I try them all on.
What happened was, I got the best-fitting jeans I had ever owned and felt worse about it than I had ever felt before. And that really got me thinking, why should it be that I do better and I feel worse? The result, some years later, was this book, which tries to answer that question. How can people do better in a world with so many choices and feel worse about how they do? That’s the short answer.
The longer answer is that I’ve been thinking for 20 years and writing for 20 years about the ideology of free markets that dominate the economics and what we know from psychology about how people actually work. The principle justification and celebration of free market is the choice that it gives people, so if it turns out that that’s a mixed blessing, then the other so-called virtues of the free market need to be examined more carefully. As I say, I’ve thought about and written about how economists get the psychology wrong for 20 years, and this is just one specific aspect of that more general project of mine.
Jared: As you’ve been doing research into choice, how do you go about figuring out how people make choices? What are the types of research methods that you’re using?
Barry: The laboratory mostly involves giving people hypothetical sets of options that are described and then seeing whether there’s some consistency on how people choose among those options and then trying to model the implicit mechanisms of information gathering, information evaluation, and attaching value to things. And often it’s like hypothetical gambles. Would you rather have 10 dollars for sure, or a 50/50 chance to win 20 dollars? You ask people millions of questions like that and you come up with a kind of psychology of choice and of value. But none of that really addressed the question of choice magnitude as a variable, because typically, people would just be given two options to choose from and it never occurred to anyone that how many options there were might matter.
Then this psychologist at Columbia did a study when she was a graduate student at Stanford that’s now become quite famous, the jam study, that showed when you present 30 flavors of jam at a gourmet food store, you get more interest but less purchasing than when you only show six flavors of jam. All of a sudden, it became an issue, or at least a possibility, that adding options could actually decrease the likelihood that people would actually choose any of them. More and more, because of that study, people have actually tried to study it in the wild, in the field, by getting companies to vary the variety that they offer and tracking both purchasing and also satisfaction. So that’s starting to happen, but there are not very many papers that are actually published on that. This whole line of work is only about five years old.
Jared: Are people looking at new research techniques to try and get some of these answers?
Barry: I think what people are trying to do is get actual people in the world of goods to let them do experiments. I have tried, so far without much success, to influence people who run various websites to do research where instead of offering 40 CD players, you offer 20, or 10, or five, and you do it for three hours one day, and you look at the rate of conversions, that kind of thing.
Or, to change the way in which the options are structured so that people go through a series of binary options to get to the magic CD player which is the one they want, instead of having all of them presented at once. I think that’s the kind of research that should be done. My guess is that a lot of that research is being done in house, because people are obsessively concerned with how to make their websites as user-friendly as possible. I don’t know whether this work has been theoretically motivated, and whether the kind of stuff I write about has played much of a role, but it certainly should play a role.
Jared: We did a study a while back. We were studying how people shop online. We found people who were in the market to buy a digital camera, and we brought them to sites that had the cameras that they were looking for. We gave them the cash to actually purchase the camera.
Barry: Oh, so it was a real thing.
Jared: Yeah, and they got to keep the camera if they decide to purchase it, if they don’t decide to purchase it, they got to keep the cash. What we found that the more digital cameras that were available, the harder it was for people to purchase. It was very interesting, because one of the sites we studied was Best Buy. Now, the average Best Buy store has 40 digital cameras on display, but their website has 136.
Jared: They would see these large lists of cameras, which are in essence little silver boxes that all look alike. On the web, they look even more alike than they do in the store. People were just completely baffled as to how to discern and differentiate between them. One of the things we noticed in that study is in reality, people aren’t even interested in buying a digital camera. They’re interested in pictures. Most of the people who came in to our study, their big interest was in the pictures they were going to get.
We had one guy who was going to Costa Rica for a month and he was going to be out in the wilds of Costa Rica. I don’t know what he was doing, hunting dinosaurs or something. He knew he wanted a camera that was going to take great pictures in the outdoors and have really long battery life and store a lot of pictures, because he wasn’t going to be able to get back to any place where he could upload them for weeks. He had all these criteria, he knew. The websites did a very poor job of helping him figure out which ones were going to give him the best pictures, for the best price, with all these different kinds of things.
Barry: Well, what people tell me, and I’m way out of my element here, is that the lure of web design, when you got 20 seconds of somebody’s attention, so you’ve got to get everything you have to say out there in that 20 seconds, and it’s got to all be on the first screen, because people aren’t going to click further down into your website. One of the things promoted was this unbelievable morass of information, because if we don’t get them in here now, they’ll never see it, which I think is the worst.
That might make sense when people have five or six possibilities to choose from, it’s going to be a disaster. Nobody’s going to go through that. The only exception is this guy you just described, because if people know exactly what they want, giving them a lot of choice is a good thing, because it increases the chances that they’ll find exactly what they want as long as it’s possible to find it.
But most of us don’t know exactly what we want, we have a kind of rough idea of what we want, but we hope that the world will help us refine that idea. Under these conditions, 140 digital cameras is a nightmare. I went through this. We have grandchildren, we take a million pictures, we’re terrible photographers, we throw most of them, it seemed crazy. So we said, "We’ve got to buy a digital camera." Read consumer reports, threw up my hands, and it was a year and a half later that I finally gritted my teeth, followed my own advice and called a friend and said, "What kind of digital camera do you have?" I just bought what we had.
Jared: That’s just interesting, because a lot of people came into our study, and we gave them a week to do research on the products. So we told them what their budget was going to be and gave them a week. They came in with a shopping list. Many of them, we asked how they figured out what sort of cameras to buy on their shopping list, and they said, "Oh, well, I asked my husband," or "I asked my buddy, he’s an expert on this stuff." What would happen is that person would give them a specific model, and we’d bring them to that site, and they wouldn’t be able to find that specific model. They’d be at this loss, because they wouldn’t know the equivalent. And even consumer reports, we even noticed the people doing the research on consumer reports, unfortunately, is usually one or two inventory cycles behind what the stores had.
Barry: Always, not usually. I have yet to find any of the models Consumer Reports is rating in any store.
Jared: Exactly. The websites, when they would present their products, people would type in these model numbers that were in Consumer Reports, and the site would say, "I’ve never heard of that." Even though they did sell it a little while ago and they have a very equivalent product right now, just forcing people into this choice-making.
Barry: And I think the big message of this, and I hope will be of real relevance to your audience, is that the challenge and the achievement in the last generation of digital technology was getting information to people. It was a massive achievement, it’s just extraordinary. But now the task is filtering the information for people. People are completely overloaded with information, and the prod, the brass ring is going to go to whoever figures out the best way to provide filters.
Conceivably, even personalized filters, the way Amazon recommends books to you based on the book you’ve gone looking for. My own experience with Amazon is that it does a remarkably good job, the things it suggests to me, I don’t buy them all, but I’m interested in almost all of them. Algorithms like that are the only hope that people have to get through all the options that are out there, and that’s the challenge out there that software designers face.
Jared: I wanted to ask you about that, because we’ve noticed the Amazon’s "Customers who bought this book also bought" works extremely well for books and CDs and DVDs. We notice that it doesn’t work so well for things like electronics, because you may buy three or four books. I’m the type of person who goes into a bookstore and walks out with a pile of stuff, even though I only intended to buy one book.
Jared: But people don’t, when they’re shopping for a digital camera or a recorder or a television, don’t walk out with four televisions.
Barry: No. I think it may be unique to that. There are a couple of things about Amazon worth pointing out, because people often present Amazon as a counter-example to my arguments, because Amazon is presenting you with two million choices. People seem to love it. I think most people, I certainly, who shop on Amazon for books are not browsing. They are looking for a particular thing. So they are sort of like this traveler who wanted a particular camera with a long battery life and lots of storage, he knew exactly what he wanted. If you know exactly what you want, the bookstore with two million choices is heaven, because it’s almost certainly going to have it. If you don’t know exactly what you want, it’s a disaster. So that’s one point.
The second point is that books and records are different from most other things in that consuming one doesn’t mean you’re not going to consumer another. So it’s not the same as choosing a restaurant, you’re only going to eat one dinner. But reading Book A may well make it more, rather than less, likely that you’re going to read Book B. I’ve never used Amazon for electronics, I’ve only used it for books and records, but now that you mention it, I can’t even imagine what it would mean to say people who bought this digital camera "also bought".. who cares?
Jared: Right. So what Amazon’s doing now, is they have a feature that in their electronics where it doesn’t say that. Instead, what it says is "People who looked at this product eventually bought" and then it lists the top five things they eventually bought. Interestingly enough, they give the percentage of people who bought each thing. So what they’re basically doing there is saying, "You’re in a collection of folks who investigated this product, and we’re going to tell you what other people who investigated this product have eventually ended up doing."
Much of the time, people end up buying the product that you’re looking at, but you’ll find instances that people ended up buying.
Barry: Something else.
Jared: Something else.
Barry: I think that’s great. I think this is in effect, we’ve got a democratic filter, and it’s great as long as it’s honest and some clever person can’t figure out a way to manipulate it so that everybody ends up going to his product. Know what I mean? If it’s actually an honest representation of real people doing real shopping, then it’s what most of us would love to have in the way of information.
Jared: What we’ve seen is that people respond very well to it. It seems to work very, very well. Are you familiar with a study that was published in Harvard Business Review a while back called "Defeating Feature Fatigue?"
Barry: Indeed, I’m planning on talking about it when I talk at the UI Conference. To me, the deep lesson in this is that people don’t know what’s good for them.
Barry: Because no matter how many times we have the experience of getting something that can do everything and never using it because we can’t figure out how to get it to do anything, when the next opportunity to buy something comes along, we make the same mistake with a different product. It’s kind of frustrating to know that people don’t seem to be able to learn from their experience that usability is much more important than capability. I am familiar with that study.
Jared: For our listeners that may not have been familiar with that study, these extremely bright people from the University of Maryland gave people options to buy CD players. Some of the CD players had less options and some had more, and they paid attention to what the people bought, but they also paid attention later to how they rated the product as usable. They asked them up front, the thing that attracted my attention, whether they perceived the products would be more usable. Then, after they’d had a chance to use it, they asked them their perception of usability after having used it.
They found that the people who when they were buying the thing thought the systems would be far more usable than they actually were, and they gravitated to these things with features, and then afterwards they rated the usability to be much less if they bought those systems with a lot of features.
Barry: That’s right. And the exception to that was in a study where they actually let people use the most feature-rich CD player for a little while before making their choice, and that was enough to push people in the direction of simplicity. So after you’ve actually seen how hard it is to get the CD player to do what you want, you opt for the simple one. What’s striking to me is that people seem to need to learn this lesson anew with each piece of technological equipment they buy. It’s not this is unique to CD players. You can’t name something technological where there isn’t a trade-off between capability and usability.
Barry: At least, I don’t know of any.
Jared: Yeah, I don’t know of any either. It’s an interesting puzzle. I think that there are sites out there know that are beginning, like manufacturer sites. They’re beginning to let people play and demo their products in advance. And I’m wondering if the various commercial sites are going to start putting those features in. One of the things is, there was a study out of Denmark that showed that 50 percent of returns to stores are because people are not able to operate the devices they’re purchasing.
Barry: Really. What can I say? I’m certainly not shocked.
Jared: So I’m wondering if there’s going to be a move amongst the consumer retailers to start looking at usability because the returns are just too expensive to handle.
Barry: Well you know, maybe somebody will figure out how to do it so that there is a kind of… What I suggest to people in the software world is, if you’re designing a product like PowerPoint or Word, something like that, you want to essentially have all the default settings be what 99.7 percent of the people who use it want. And then you hide most of the options and let the adventurous and technologically sophisticated people find all this flexibility.
But Microsoft has never managed, with each upgrade, to pull that off. Every time they improve Word they make it harder to do the simple things. At the same time that they make it possible to do all these other things that you can’t even imagine ever wanting to do. So figuring out what the defaults should be and figuring out how to actually write software so that the flexibility doesn’t interfere with the smooth operation of the simple version is, I suspect, a major challenge.
I don’t think there’s anyone who doesn’t understand that this is what you want to do. It’s just not so easy to achieve.
Jared: So a lot of our attendees at the conference and people who are listening to this are involved in conducting research studies, either field studies or laboratory based usability studies. So they have an opportunity to have a person sitting in front of them and to watch them go through this process of making decisions. What would you suggest that they be looking for and how would you suggest that they go about making sure that they take this paradoxical choice into account as they’re doing their studies?
Barry: Well that’s a great question and if those are the people who are going to be here it’s a wonderful opportunity to put some of my ideas to a much more rigorous, empirical test than they’ve had. But the one thing I think that nobody thinks to look at, that’s really important, is what occurs after the decision is made.
That is to say, people who worry about this assume that, however it is you go about making a decision, once you’ve made it and you have the product, your satisfaction with the product is just going to be a function of the product. If it’s a good product you’ll be satisfied and if it’s a bad product you won't be. But the process by which you got the product will no longer be relevant. And this, I think, is a huge mistake.
So people in web-based sales will spend lots and lots of time studying satisfaction with the process of choosing whatever it is that people choose. But then, two weeks later, they actually get the product in the mail and no one’s interested in how happy people are with the product. I think if people have a hard time choosing a product, that’s going to affect their satisfaction with it long after the choice has been made. So, at the very least, I think this research needs to extend beyond the decision making process to the actual consumption of the good, to see if the suffering people go through in deciding weeks into the actual experience with the product. Does this make sense?
Jared: It does. For example, some of our clients work on university websites. So they’re providing… You know these days, course selection is often done by looking at the web. You no longer get a catalog. So people are choosing the courses that they’re taking, and making all those decisions that go into university life, from this material on the web. How would you suggest that they… Do they contact the students a month after the classes start and see where they’re at?
Barry: Absolutely. Now of course you’d need something to compare this to, like how people react to the courses they’re taking as they’re taking them if they’ve done their choosing the old fashioned way. But it seems to me that if you’re actually experimenting with ways of presenting information to students, the thing to do would be to construct two or three different versions of course selection information and randomly assign these different versions to different students. And not only track the choice process and people’s satisfaction with the choice process, but then follow up, as you say, a month later to find out how satisfied they are with their classes.
I think that second piece is an important piece to do and it’s one that just doesn’t occur to people. It doesn’t occur to people that you can make it so hard for people to choose, that they’re going to blame the product they’ve chosen rather than the process that you’ve put them through. And I think it should apply to consumer electronics, it should apply when you go on vacation, and it should apply to what courses you take. It should apply, in principal, to pretty much anything.
Jared: Yeah, one of our clients is a credit card company. They’ve been struggling with the fact that they offer like 25 different types of credit cards. Some give points, some give cash back, some have lower rates and some are for people who don’t have good interest. And they have found that the more of the options that they present to people, the harder it is to get anybody to sign up for them.
Barry: Really? Well there’s a real life example of what I write about.
Jared: Yeah, it’s been very impressive. So they’re sort of gravitating to limiting the number of cards. But the problem they have is that they don’t’ know what cards to limit to because they don’t know what situation you’re in.
Barry: Well, it shouldn’t be that hard you know? You ask people two or three questions.
Jared: Right, so there’s this new movement called guided selling, which is an attempt to figure out what questions to ask and then guide people to those choices. But it turns out that that problem is really hard. If you ask the wrong questions, people loose interest in process.
Barry: No, no, no, I’m not saying it’s an easy thing to solve. It’s not easy. And it may be that there’s no set of questions you can ask that isn’t going to loose some people. But the question is, compared to what? So if you loose five percent of your potential customers because you’ve structured things in a way that they fall off the tree and, unbeknownst to you, you’re losing 25 percent of your potential customers because they’re so overwhelmed with the options that they just can’t be bothered, then only losing five percent is enormous progress. It’s a real improvement.
And I don’t think there’s any way to design questions where you won’t end up losing somebody because you haven’t designed the questions exactly right for that person. But I think people are losing massive numbers to potential customers or clients by having a presentation of the product that’s so bewildering that people put if off for tomorrow. Except that tomorrow’s no different from today, so they put if off again.
In the world of financial services, this same person at Columbia showed that when you look at Vanguard 401(k) plans in a variety of different employers, where what varies from one employer to the next is the number of mutual fund options that they provide, the more options the employer provides, the less likely people are to choose any of them. Even though not choosing mean passing up significant amounts of matching money from the employer.
Now this is a massively significant finding. Americans don’t save enough money in general. We think we do them a favor by giving them so many different options that there’s got to be one in that set that’s just right for their willingness to tolerate risk or what have you. But in fact this is the opposite of a favor. We’re creating a situation where people are paralyzed. They know there’s got to be a right answer to the question, "Which fund should I choose?" But they have no idea how to choose it.
This new pension-whatever-it-is-reform act that just got passed has in it a provision, this is not the main point of the bill but there are provisions in it that will enable companies like Vanguard and Fidelity and employers to, in effect, make recommendations to employees. To provide them with a limited set, not a huge set, of choices after the employees answer a couple of questions. And I think this will dramatically increase the rate at which people participate in retirement plans, much to everyone’s benefit.
Jared: Yeah, I think that was very interesting. A lot of the people who are going to be at the event are working on, or considering work on, what are called recommendation systems, systems that recommend options to people. One of the ones that we’ve been looking at a lot is the recommendation system used by Netflix. I don’t know if you’re a Netflix subscriber.
Barry: We’re getting more and more tempted to be Netflix subscribers every day. We’ve had this loyalty to a local video place, but more and more often they either don’t have it or they have it and it’s out whenever we want something. So we may eventually succumb. But Netflix does a wonderful job.
Jared: Well Netflix has done something very interesting lately. You can add friends to your Netflix system. And then it shows you not only what the general public recommends, like Amazon does, but it separates out the recommendations of your friends. So you can see how your friends rate certain movies different. So you can decide which of your friends actually has good taste in movie and you can then base things. Plus, when you for instance return a movie, it will prompt you and you can quickly send a recommendation to your friends. It’s just a two sentence thing that says "I love this, it was really funny."
What we’ve been finding in our initial look at this is that that recommendation email holds far more weight than pretty much anything in terms of people deciding to put something in their queue, on their list.
Barry: I’m not surprised at all that that’s true.
Jared: So I’m wondering for instance in the mutual fund world, the employer options, if we could see something that took advantage of that type of social networks. Where you could designate people who you think are really smart and get their recommendations separate from the rest.
Barry: Well maybe, but it may not be necessary in that domain because it’s presumably less a matter of taste than it is in the case of movies. So I think as long as the mutual fund company has a reputation for integrity that is beyond reproach, probably it can offer the recommendations. You know, "You don’t’ have to worry about figuring this out. That’s what we do. We do it for a living."
And I think that certainly huge outfits like Vanguard and Fidelity, at least at the moment, have that kind of reputation. I imagine that most people would much rather be told by Fidelity what they ought to do, given how old they are and when they plan to retire, than by their friends, even their smart friends. But I don’t know. You might be right.
Barry: Some things are matters of taste and some are less matters of taste, where you might really want to just get an expert opinion.
I’d worry, to some degree, that when the stakes are high, as they are with investment retirement funds, that people are worried about legal liability if they make recommendations. So people are very wary to suggesting the course that others should follow. You know?
Jared: Right. Well I think that part of it is this fear of litigation, "You recommended this and it turned out..,"
Barry: Exactly so. I think doctors are increasingly gun-shy about recommending treatment options instead of just laying them out and presenting, in as objective a way as they can, what the plusses and minuses of each one are. And this is partly the ethic of modern medical practice, which is that the patient is in charge, and partly fear of being sued.
And you see this all over. In the domain I know best, the world of academic institutions, increasingly, especially in the more selective places, they essentially don’t tell students what to do. They give you this gigantic list of courses, "Take 10 of these and you will have met our liberal arts requirement. We don’t care which 10." Here are these 18 year olds who don’t know squat, and people who do know something aren’t willing to tell them what they ought to do.
Jared: That’s interesting because I’m actually in an engineering management master’s program at Tufts, and our students are people who’ve been in industry and our coming back to school to get this management degree. And it’s a single track program. They’re not giving any choices in terms of courses.
So it’s sort of ironic that we let the 18 year olds, who don’t have experience and don’t have an understanding as to what direction they specifically want to go in, have all the choices in the world. But don’t we give these people who’ve been in industry for 15 or 20 years, who probably have specialties that they really want to focus on, any choice. We just give them the path we want them to go on.
Barry: But this may have less to do with that than with the fact that it’s engineering. I don’t think our engineering students have a whole hell of a lot of choice either. It’s a very structured curriculum. There’s stuff that you need to teach in order to get certified by whatever, you know The National Board of Engineers and stuff like that. But outside that domain, it’s pretty much anything goes with modern college students, especially, as I say, in selective institutions.
Jared: Yeah, that’s interesting. You’re famous, in your presentations, for using New Yorker cartoons.
Barry: Am I famous for that?
Jared: Yeah, absolutely. And there are thousands of New Yorker cartoons to choose from.
Jared: How do you decide?
Barry: How do I decide? Well, I must say that if I had even contemplated going through the New Yorker to find appropriate cartoons, I would never have done it. What has happened, and I’ve been doing this for years even when I worked on different topics than the choice problem, when I see a cartoon in the New Yorker that strikes me as relevant to anything that I work on or even teach, I clip it. And so I have file of New Yorker cartoons, some of them related to this and some related to other things. So I have, as it were, been doing the selecting online rather than going through 75 years worth of cartoons. That would be quite daunting.
And I must say that they work very, very well. People really like them. And I like them both because they kind of break up my talk, wake people up, make them laugh, and also to show that there are people other than me in the world, who I don’t even know, who aren’t relate to me, who have expressed similar concerns in their own humorous and creative way. Just last week there was another one that your audience will see that, if it had existed before my book came out, would probably have been on the cover of the book. But I don’t want to give it away.
Jared: Ok. We’ll be anxious to see it.
Jared: Well thank you for coming. We’ll see you on October 12th.
Barry: I’m really looking forward to it. I can’t imagine a better audience for talking about these issues. I’m just trying to figure out what the right way to proceed is for the people who will be coming to the conference.
Jared: Well we hope we’ve chosen the audience well.
Jared: Excellent. Thank you very much for talking with us.
Barry: Great talking to you Jared.
Jared: Thank you.
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