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To Give or to Get: The Paradox of Choice and Prosocial Spending

In the early 1830s the French political historian Alexis de Tocqueville came to the United States to study American society. What came out of his travels and research was Democracy in America, a two-volume giant that explored the democratic revolution and its implications to western society. One trend that Tocqueville observed and was particularly perplexed by was how dissatisfied Americans (white American men most likely) were with their lives even though they lived in one of the most privileged societies in the world. “In America,” Tocqueville explained, “I have seen the freest and best educated of men in circumstances the happiest to be found in the world; yet it seemed to me that a cloud habitually hung on their brow, and they seemed serious and almost sad even in their pleasure. The chief reason for this is that… [they] never stop thinking of the good things they have not got.”

That was back in the 1830s, when Rockefeller and Carnegie were babies and the Mall of American was a corn field. (One can only imagine what he would have to say about 2011.) Aside from his social critique of consumerism, Tocqueville made a keen psychological observation, which has recently been confirmed by psychology data. It’s called the paradox of choice, and it describes our tendency to be less satisfied with our purchases the more options there are. Here’s one study that nicely illustrates this.

Researchers set up a jam tasting counter at a gourmet food store. There were two conditions. In the first 6 jams were available and in the second 24 were available. They found that even though the same amount of samples were tasted, 33 percent of customers bought a jam when only 6 varieties were offered for tasting while a mere 3 percent bought jams when 24 varieties were offered. The researchers followed up this experiment with one that replaced jam with chocolates and shoppers with undergrads. The key finding in the second experiment was that the participants who picked from more chocolates weren’t as satisfied as participants who picked from less chocolates. Jonathan Haidt summarizes the implications of both studies best: “the more choices there are, the more you expect to find a perfect fit; yet, at the same time, the larger the array, the less likely it becomes that you picked the best item. You leave the store less confident in your choice, more likely to feel regret, and more likely to think about the options you didn’t choose.”

To be sure, some choice is good. As Barry Schwartz explains, “freedom and autonomy are critical to our well-being, and choice is critical to freedom and autonomy.” But too many choices make us worse off. “Nonetheless,” Schwartz continues,”though modern Americans have more choice than any group of people has before, and thus, presumably, more freedom and autonomy, we don’t seem to be benefiting from it psychologically.”

Is it possible to avoid the paradox of choice? In a society where there is an option for everything (my local drug store carries about 30 different brands of floss!) it seems impossible. But here’s one idea: spend your money on other people (what’s called prosocial spending) , it will make you happier.

Consider a study from a group of researchers out of the University of British Columbia. The experiment was straightforward. First, they gathered University of British Columbia undergrads and asked to evaluate how happy they were. Then they gave each of the undergrads an envelope of cash with either five or twenty dollars (Canadian dollars). The researchers created two groups: one was told to spend money only on other people and the other to spend money only on themselves. At the end of the day they called the volunteers and asked them what they had bought and how happy they were. They found that regardless of how much money they were given and what they bought, the prosocial spending folks were happier than those who spent the money on themselves.

There’s an important byproduct of prosocial spending: it alleviates the paradox of choice – it’s much harder to be dissatisfied with a purchase when giving is the satisfying part. But maybe this is backwards thinking. Tocqueville’s problem might be worsened if everyone only bought stuff for other people. Instead of everyone always thinking about what they don’t have, everyone might always think about what they haven’t received from someone else. Somewhere in the middle is probably best. Buy stuff for you and other people while keeping in mind that the cheesy, “it’s better to give than receive” cliché might contain a grain of truth.

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