Have you heard of Fear Of a Better Option yet?
We know that making choices is hard. The more choices we have, the less we explore, and the more likely we are to go with a default setting. Even more interesting, research by Iyengar and Lepper (1999, 2000, 2002, 2004....) shows that when people are provided with fewer options in a decision-making task, they derived greater satisfaction from their decision outcomes as compared to those who had ample options. This seems so counter-intuitive, so paradoxical that it has been dubbed the Choice Paradox (or choice overload).
Is this something that Fear Of a Better Option (FOBO) could explain?
What is FOBO? FOBO, the younger sister of FOMO (fear of missing out), has come upon us. And yes, both terms are coined by the same guy: Patrick McGinnis, a US venture capitalist. He proposes that the Fear of a Better Option is the reason we can't commit to anything. Well, for such an immense statement, I feel we should dive in deeper. Shall we? FOBO as a theoretical concept is quite easy: you're scared something better is out there, or is going to come along, and as such you find it difficult to make a choice. You might find the choice so difficult, you might be willing to postpone it, indefinitely. You might NEVER commit (*article intensifies*).
What does FOBO do? No all jokes aside, the idea that there is always something better out there is damaging. If there's no time limit in place, people might take weeks, months or years to commit to just one thing. Ironically, from the Homo Economicus perspective, this might not be as irrational as one would think. The Homo Economicus is a utility maximiser. How does one maximise utility? By choosing the best option out there. How do you find the best option: research. Exploration and finally, exploitation (Hi Thomas). But research in today's world is endless. Think of buying a mobile phone. If you have no brand preference and no budget constraints, the world is your oyster. By the time you have surveyed all possible options, traded off price against functionality against aesthetics etc. Newer phones will have been released and you can start over again. Still not having bought a new phone. In real life, this behaviour isn't remotely adaptive: it takes up too much cognitive resource, if not taking up too much time in general. To remain in a state of indecision is to waste resources whilst going back and forth on your choice. Luckily, in real life, there are such things as time constraints (when do you need the new phone by?), budget constraints (how much money can you spend on the phone), and choice restricters such as brand preference, loyalty or position within the market the consumer is functioning. But even then... Besides FOBO there are other things to look out for are regret and disapointment theory (Hi Graham and Bob!). Without getting too technical, both these theories postulate that measuring the utility of a choice option (which is near impossible) isn't enough on its own. You also need to account for the possible regret and/or disapointment (these are different theories!) one might experience having chosen one option, and not the others. In some cases, the initial utility value will decrease as a result, although for some options it might be able to increase. The theory is very intuitive: I experience the value (utility) of my choice -/+ the value of having chosen it over all the other choices. With FOBO, this reduction is explained as the fear of something better being out there, or potentially coming along.
How to reduce FOBO?
So FOBO is an issue. It reduces the value of a choice, out of sheer fear of having committed too early, or of having committed at all. But as I said before, continuously wasting your resources on the choice having been "the right one" costs so much additional stress, worry, time and other cognitive resources, that it isn't healthy, nor productive. As such, it is quite a good idea to try to get away from FOBO. Given that FOBO is mainly caused by the inability to explore all options (there's just too many) and this motivates the fear, you're best off having a restricted pool of choices. Choices can be artificially restricted, by either yourself or a friend. Let's get back to the phone example: build a list of clear criteria for this phone: maximum price, functions you need, aesthetics you care about, size, weight, age since release, brand (if you have a clear preference). This is quite restrictive. Your pool will end up with several models from one brand in one pricing segment. Pick a colour and a screen you like, move to check out, buy the damn thing and Bob is your Auntie.
Another way of just "getting it over with" is to put artificial timelimits on yourself, if the circumstances haven't already done this. In the example of the phone
But even then, there is the possibility of regret. This regret is palpable. But, also mainly based on YOU having made the choice. And yes, you can pay people (or nicely ask close friends or relatives) to make the choice for you. It's why a lot of people turn to advisors and consultants. For expertise, for inside knowledge, but often also to have someone make the decision for them. I'm not saying this type of "diffused responsibility" is always a good thing. But sometimes, not having to spend 3 weeks debating every single choice that has to be made, is a good thing!
Most importantly, to just wipe out regret, you need to stop looking after you've committed. You can't keep searching for better options (talk about a marriage counselling tip!). In case of the phone, don't keep looking at other phones! This is guaranteed to drive someone insane. And only very rarely does it confirm you have picked the best one, so stop!
The lucky thing is, however, that in case of the phone, you are going to get used to this apparatus rather quickly. And once you're used to it, know its shortcuts and quirks, you are going to love it more than anything else. Why? Endowment effect! And this effect can extend to any choice you make. So, there is something combatting FOBO! It just needs a little time to kick in :)
* The odd, slightly random shoutouts in this article were to the teachers who introduced me to these concepts, and who significantly contributed to this area of research, if not founded it.
References: Anything by Iyengar and Lepper on choice and choice overload can be found here: https://scholar.google.com/scholar?hl=nl&as_sdt=0%2C5&q=Iyengar+and+Lepper++choice&btnG=
Loomes, G., & Sugden, R. (1982). Regret theory: An alternative theory of rational choice under uncertainty. The Economic Journal, 92 (368), 805-824.
Loomes, G., & Sugden, R. (1987). Testing for regret and disappointment in choice under uncertainty. The Economic Journal, 97 (Supplement), 118-129.
