The excessive choice effect meets the market: A field experiment on craft beer choice

Abstract

Research in psychology suggests that, somewhat paradoxically, providing consumers more choices can reduce the likelihood of making a purchase, producing the so-called excessive choice effect (ECE). To the extent an ECE exists, firms have an incentive to alleviate the effect through a variety of institutional nudges that promote consumers to make a choice. This study empirically tests the effectiveness of two institutional nudges on the ECE in a field experiment at a bar. Focusing on craft beer sales, we manipulate the number of options on the menu and use institutional nudges (a control menu, a menu with a special prominently displayed, and a menu with Beer Advocate scores). In the field experiment, the ECE was alive and well using the control menu, but the effect reversed itself when the menu included Beer Advocate scores. Our results suggest the ECE might be turned on and off by manipulating search costs.