The Perils of Choice

I have always taken for granted that more choice is always preferable to less. The virtue of choice is not only an integral part of my of my political views, but also obviously beneficial to my material wants. The wider variety of clothing styles, television shows, and music that are available, the greater the chance that I will find something of interest. I've been skeptical of those who say that people would be better off with fewer choices, to make their decision-making process simpler. Yesterday, however, while shopping for a shirt at Buffalo Exchange on Telegraph, my theory of choice as unequivocally desirable was put to the test.

Several shirts on one rack alone looked good; no one was head and shoulders above the others, though. Once I had about four shirts in mind, each consequent shirt was subject to much more scrutiny. I looked at the price tag of one and saw that it was $22, twice as much as the others and only marginally nicer. Instead of being put-off that the shirt was more expensive and thus not an option, I was relieved to have narrowed my decision.

This seems to conflicts with one of the general assumptions of economics that people are rational. In theory, my reaction to the higher price was entirely irrational. Why should a consumer wish to see a higher price on a desirable good under any circumstance? How can mental "tricks" overpower rationality in seeking contentment.

However, it can be argued that my actions were, in fact, rational. If I can assign a price-value to NOT having to make a decision about 5 shirts but rather just 4 shirts, then I can weigh opportunity benefit against opportunity cost. Let's suppose that the marginal opportunity benefit of the $22 shirt vs. the $11 shirts is actually just $2 (that is, I value the more expensive shirt by only $2 more than the cheaper ones). Let's also suppose that the marginal opportunity cost of making a more difficult decision is $3 (it pains me $3 worth to have a tougher decision). From these suppositions we find that marginal cost exceeds marginal benefit by $1. Therefore, my response to the more expensive shirt was entirely rational.