Switching behaviour as a function of number of options: How much is too much for consumer choice decisions?

Abstract

AbstractThe number of alternatives for consumers in almost all purchase situations is increasing at an extremely rapid pace. Although more choices may have many benefits to the consumers, recent studies on choice overload have found that choosing from large alternatives may lead to negative consequences. Majority of the choice overload research has compared only two groups of small versus large assortment size. In extant literature, there is no clarity as to what are small and large assortment sizes. Assortment size used as small in one study has been used as large in some other studies. Small assortment size varied from 2 to 60 choices and large assortment size from 3 to 300 choices in past studies, and the presence of choice overload has been reported at completely different levels of assortment sizes. This study has used an array of six choice sets from 6 to 36 options as compared to just two groups of small versus large assortment. Switching likelihood of consumers was used to capture the choice overload effect in this study. The probability of consumers switching their earlier choice was plotted as a function of number of options using binary logistic regression. Results showed that probability of switching was almost a linearly increasing function of assortment size from 6 to 36 options. The graph of predicted probabilities from 2 to 300 options showed a sharp increase in switching behaviour initially and subsequent flattening of the curve when options became very large.