Abstract

In our information-rich world, people face a great many choice alternatives involving both small and large stakes, from jam and chocolate to health and pension plans. Though classic economics and psychology have both traditionally emphasized the benefits of more information and greater choice, a sizable and parallel body of research has demonstrated that having too much information or too many choices can lead to information and choice overload, choice paralysis, and negative affective states connected with both the decisions process and the choice outcome. This chapter offers a concise summary of evidence collected by researchers for more than half a century on how people deal with large amounts of information and how they make choices from sets with multiple alternatives. The simple cost-benefit model proposed in earlier research is discussed in relation to the mechanism underlying the choice-overload phenomenon.