Are you a maximiser or a satisficer?

Reaching a decision may also involve trade-offs, which have an unfortunate side effect of making you consider what you are giving up in making the maximised decision, the mere thought of which can lead to later regret. Like noticing the holes in the soles of your children’s shoes while they run around at work barbeques.

In The Paradox of Choice by Barry Schwartz argues the above influences coupled with “the curse of social comparison”, an affliction driving many of today’s maximisers, manifests in varying ways and often as depression.

According to the national depression initiative, Beyond Blue, depression is the leading cause of non-fatal disability in Australia, affecting over one million adults and 100,000 young people at a cost of over $600 million annually.

With little in the way of available public statistics on the prevalence of affective disorders, such as depression, prior to the 2004 formulation of a National Depression Index, the Australian Bureau of Statistics (ABS) is one of the few providers outside academia holding relevant numbers. Based on ABS mental health surveys performed in 1997 and 2001, the compound annual growth rate (CAGR) of depression over this period was 5.2 per cent.

Interestingly, consumer spending increased at a CAGR of 6 per cent over the same period.

Coincidence and disputable statistical methodology? Perhaps. An indication of positive correlation or a causal link between consumption rates and depression? Maybe - academic investigation of the influence of increased choice on anxiety and depression is not widely reported and arguably remains in infancy.

Is it worth considering the effect of increased choice on anxiety and depression? Definitely.

Nobel Laureate Herbert Simon came up with the alternative to maximising back in the 1950s - satisficing. A satisficer settles for something good enough, or within certain parameters, without worrying there might be something better out there. Simon even acknowledged part of satisficing was acceptance that the outcome was not perfect in light of all possible choices.

The point of satisficing is that the decision reached is within predetermined guidelines of what you find acceptable. You decide in advance, and don’t tinker with the rules you set out making “marginal incremental improvements” while the search is underway. When he initially introduced the idea, Simon suggested when the time, money and anguish involved in getting information about all your options are incorporated, satisficing is actually a maximising strategy. More simply put, the best thing you can do is satisfice.

How would we actually do this? We could start by choosing, instead of picking. Choosing involves reflecting on what makes a decision important, including whether doing nothing is an option or that new possibilities may be an idea. Picking, on the other hand, is what we do when facing overwhelming choice.

We could also aim to satisfice more and maximise less. A $100 Weber barbeque kettle will cook your food to perfection, just like a $7,000 stainless steel Rinnai. What’s more, you won’t spend the extra $200 on a rain cover for the Weber to protect your valuable investment from the weather. It’s not a depreciable asset - it’s a barbeque.

Another idea is thinking about the opportunity costs of opportunity cost. These costs should always be considered - ignore them at your peril - but as you consider things you will forego, look at how much effort you are putting into that exercise.

We should also consider making more of our decisions irreversible. If you can’t easily change your mind, you tend to consider alternatives more seriously at the outset. I thought long and hard when I last bought a house because the vendor had a “no-returns” policy. Try extending that process to a few other aspects of your life - you’ll be surprised at the difference it makes to your thinking when you tell yourself “I can’t take this back if I don’t like it”.

Finally, set some constraints around your choices. Putting parameters on your decisions helps you control your own expectations, minimise the “curse of social comparison” and regret less.

Something we’d all like to do a little more.