May Recap: The Paradox of Choice

At our May luncheon, FWAHU members were presented with a short video of a talk by psychologist Barry Schwartz, author of a book called “The Paradox of Choice – Why More is Less.” Mr. Schwartz explains in the video, as he does in his book, that Western dogma says if we are interested in maximizing the welfare of our citizens, the way to do that is to maximize individual freedom. If we have freedom then each of us can decide on our own how to maximize our welfare and nobody has to decide on our behalf.

The way to maximize freedom is to maximize choice. The more choice people have the more freedom they have, and the more freedom they have the more welfare they have. This thought, Mr. Shwartz says, is so deeply embedded in our culture and our lives that it wouldn’t occur to anybody to question it.

Choice is definitely a good thing, but, as Mr. Schwartz points out, it doesn’t necessarily follow that more choice is better. All of this choice, he says, has two negative effects. One effect, paradoxically, is that it produces paralysis rather than liberation. With so many options to choose from, people find it very difficult to choose at all. Another consequence of having too many choices is that even if we manage to overcome our paralysis and make a decision, we end up less satisfied with the result of the choice than we would be if we had fewer options to choose from.

Why? Because if you have a lot of options to choose from, it’s easy to imagine that you could have made a different choice that would have been better. And what happens is this imagined alternative induces you to regret the decision you made, and this regret subtracts from the satisfaction you get out of the decision – even if it was a good one.

Following the video, Eric Johnson discussed how we can apply Mr. Schwartz’s findings to the insurance industry. Knowing that people have a difficult time making decisions and end up less satisfied with the decision they make when they are presented with too many choices could help agents when deciding which options to present to the client. As agents, part of our job is to talk with our clients, analyze their needs, and narrow down the options for them. Presenting them with every available option could actually be doing them a disservice.

Following the luncheon, Joanna Antongiovanni, South Texas Sales Manager for BenefitPort Southwest, presented her four hour CE “Group Insurance 101: An Introduction to Employee Benefits.” The course was provided by the Texas Association of Health Underwriters (provider number 0426) and the course number was 47111C. The CE got great reviews and several guests were in attendance. This course was a great intro for new agents and a nice refresher for seasoned employee benefits professionals. Thanks to Joanna for making the trip from San Antonio to share her knowledge with us.