Dealing with Decision Overload

In the first of a three-part series, blogger Chris Carosa reviews why having too many choices actually hurts participant outcomes. While that’s no secret, Carosa, citing research from Columbia befi professor Sheena Iyengar, provides some concrete reasons and promising solutions.

Some people are used to complexity. Fighter pilots, quarterbacks and CEOs, for example, make an average of 139 decisions daily. Not plan participants. When faced with too many decisions, like the number of funds in their plan, they just shut down — making bad decisions or just choosing not to choose. This is why there’s a negative correlation between the number of funds and a plan’s participation rate.

Carosa’s recommendations? Cut down on the number of choices, show the concrete consequences of bad decisions — like putting all your assets in MMFs, for example — categorize the choices and gradually increase the complexity. More to come.

Add Your Comments

One Comment

  1. Elmer Rich Iii
    Posted June 10, 2013 at 12:17 pm | Permalink

    We have been studying this and the nature of humans, and any other animal, making “decisions” is far more complex than current models suggest. For example, it appears that behavior is “decided” in 150 ms, unconsciously.

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