Source: Chan, E.Y. (2024), Choice, Psychological Ownership, and Option Valuation. Psychology & Marketing. https://doi.org/10.1002/mar.22150
This episode explores an engrossing study in *Psychology & Marketing* (Wiley, 2024) by Eugene Y. Chan. Chan's work investigates how offering more choices affects a consumer's valuation of their selection. Challenging the common "choice overload" narrative, this research suggests that more options can boost the perceived worth of what you finally pick. It’s all because of a powerful sense of psychological ownership. Just in time for the holiday season, we unpack what these findings mean for marketing and for how we think about gifting.
Core Findings:
More Choice, Higher Valuation: Consistently, across four experiments, the research shows that individuals valued their chosen item more highly when they were selecting from a larger set of options, as opposed to from a smaller set. For example, participants who chose a coffee mug from 16 choices were more willing to pay for it later than those who only had four options.
Psychological Ownership is the Key: This bump in valuation comes down to a sense of "psychological ownership"—the feeling that the chosen item is truly “mine.” Presenting more choices enhances the consumer’s sense of control, making people feel more connected to their selection on a personal level.
Perceived Variety Matters, Not Just Quantity: It's not only about the sheer number of options but also about the *perceived* variety that boosts this feeling of ownership. The fourth experiment showed that if you take the same 30 movies and categorize them by genre, it will lead to both a perception of variety and more willingness to pay for a film.
It's Independent of Satisfaction: The positive impact that having more choice has on perceived value doesn't have to do with choice satisfaction, interestingly enough. More options might sometimes make decisions more difficult, but even if they do, they make that final product feel far more special than something less carefully selected.
Actionable Takeaways:
More Options, Not Fewer, Can Be a Good Thing: Marketers should think carefully before focusing only on minimizing choice in order to avoid “overload.” Instead, providing a carefully curated and diverse range of options can actually increase the perceived value of the products or services that consumers finally select. Consider the sheer range of products on offer during the traditional Black Friday sales—it’s a lot, and it can be overwhelming, but the feeling of landing on the "perfect" item can be quite special.
Highlight That Element of Choice in Marketing: Marketers can work to emphasize the control and the autonomy that consumers have when making a selection. Phrases like "Choose your perfect gift," "Design your holiday experience," and "Explore our wide selection" can tap into a customer’s sense of ownership.
Strategic Categorization Matters: Organizing products into clear categories enhances the *perception* of variety without having to increase the sheer number of items. This will help online retailers as well as those in brick-and-mortar store locations during the rush of the holiday season. Try grouping gifts by recipient, interest, or price point to create that desired effect of a wide selection.
Focus on That Feeling of Ownership: Marketing messages can generate that sense of psychological ownership. Think about personalized gift recommendations or opportunities for customization. Sometimes simple gestures like allowing customers to pick their free gift wrap paper design are more impactful than we give them credit for.
Real-World Examples:
Holiday Gift Bundles: Offering different items within a bundle (like a "coffee lover's basket" with varied beans, mugs, and sugars) might make the entire selection feel more special than a single pre-selected gift.
Subscription Boxes: The popularity of subscription boxes comes from the feeling that the *curated* choice within a theme is unique to you and your preferences. Even if the overarching box is set, anticipating that surprise selection within the theme will still enhance the overall experience.
Online Retailers and Their Massive Catalogs: While sometimes overwhelming, the huge selection on a platform like Amazon helps consumers feel they’ve found their ideal product in a sea of infinite possibilities.
Personalized Holiday Cards: Allowing people to customize the messages and choose the designs of holiday cards will increase their connection to that finished product.
This research underscores why we should be thoughtful when we make judgments about the effects of choice. While limiting the possibility of overload remains important, marketers must consider that offering a wide variety of options may foster psychological ownership. By doing so, they boost the perceived value of products, especially during gift-giving times like Christmas. When you work strategically to show off choice, you also enhance the consumer experience, which inevitably results in greater perceived value.
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