Have you ever found yourself walking up and down an electronics store like an idiot reading the tags on all of the products, trying to work out in your head what the best deal is? I have… and I don’t enjoy it. In fact, most of the time I give up and walk away.

I would rather walk away a satisfied customer, knowing that I got the best deal. Instead I am facing conflict between the deals, while being forced to weigh up too many variables.

In 1992, Amos Tversky and Eldar Shafir, from Stanford and Princeton respectively did a study on value maximization with the hypothesis that the option to delay choice or seek new alternatives is more likely to be selected when conflict is high than when it is low.

The subjects chosen for the study were students from both Stanford and Princeton Universities.

The first group of subjects was presented with the following problem:
Suppose you are considering buying a compact disk (CD) player, and have not decided what model to buy. You pass by a store that is having a one-day clearance sale. They offer a popular Sony player for just $99, well below the list price. Do you buy the Sony player or wait until you learn more about the various models.

The results were:

The second group of subjects was presented with the following problem:
Suppose you are considering buying a compact disk (CD) player, and have not decided what model to buy. You pass by a store that is having a one-day clearance sale. They offer a popular Sony player for just $99, and a top-of-the-line Aiwa player for just $159, both well below the list price. Do you buy the Aiwa player, buy the Sony player or wait until you learn more about the various models.

The results were:

Tversky and Shafir surmised that the addition of the second option (the Aiwa player) actually increased the tendency to delay the purchase.

The results show that when the single option was presented, the decision maker saw the offer as a “good buy” (two thirds of people purchased). But when they were presented with two options, the decision maker had to analyze the difference between discounts, brands and features: a much more difficult decision to make. This meant that a little more than half of the people purchased, while the others deferred the decision and put off the purchase.

Next time you think about promoting an offer, have a think about whether you are making it easy to buy or hard to choose. Remember… we are only humans.

Amos Tversky, Behavioral Economics, buying decisions, choice, choice architecture, consumer behavior, decision theory, Eldar Shafir, Princeton University, Stanford University, value maximization