Everyone wants options. But, when we have many, how do they affect our perception? Daniella Kupor, Assistant Professor of Marketing, shares her research on how more options can alter decision making. In her Harvard Business Review article, Having More Options Can Make Us Evaluate Risk Differently, Kupor explains that when outcomes are listed with other potential ones, our perception of risk changes.
For example, in one study, Kupor asked participants how likely they’d be to play the lottery. Some were presented a lottery with a prize of one television while others were presented a lottery with a prize of that same television as well as many additional smaller prizes, too. No brainer, right? Nope.
Kupor explains that regardless of the odds, the first option is perceived as more desirable, even though the second option provides greater odds to win. She writes, “Despite the fact that the lottery that included smaller prizes was more valuable, we found that participants who saw the first lottery, with only the TV prize, were more likely to enter it than those who saw the second lottery with more prizes.”
The same is true for negative outcomes. Think about medical drug commercials. In her study, Kupor found that people were more likely to take a drug with more side effects listed than they were to choose a drug with only one. Kupor writes, “How does this make any sense? We found people generally believe that larger, more significant outcomes are less likely to happen than smaller outcomes. But the odds of the larger outcome happening seem even smaller when placed alongside the higher odds of the small outcome.”