The funny thing about decisions is that they seem to work in the opposite way that we’d like them to. The more good choices you have, the harder it is to make the best decision, something author and psychologist Barry Schwartz called “the paradox of choice” in his book published a decade ago. And that’s a good thing to know, but that knowledge alone doesn’t exactly help when you’re facing approximately one zillion choices that all seem kind of okay, like when you’re choosing a health-care plan or looking for a new apartment. To address this, Tibor Besedes at the Georgia Institute of Technology led a study — published recently in The Review of Economics and Statistics — that pitted three decision-making strategies against each other, and the best strategy was the one that treated the process like a tournament.
The news release for the new paper describes the study setup this way:
The study subjects were asked to choose one option that would provide the best payoff from among 16 choices, and were rewarded by as much as $25 if they made optimal selections. … The respondents were asked to choose from a group of cards that had different probabilities of payoff. This generic choice scenario was used to eliminate personal biases that might have arisen in choosing between real-world options such as insurance plans.
Some of the study volunteers were told to make their decision by studying all 16 different options at once; others worked their way through all 16 using a time-consuming elimination process. But the group that made the best decisions did so by using the tournament strategy, which worked like this:
1. Divide the options into piles of four
2. Choose the best option from each pile
3. Put the winners from the first round into a new finalist pile
4. Choose the best option from winners of the earlier four selections
Besedes believes anyone can adopt this strategy when trying to choose between an overwhelming number of options. But that’s your decision.