If you've seen The Paradox of Choice, you know that the more choices a consumer is presented with, the less likely they will make a purchasing decision, and even if they do make a purchasing decision, the less likely they'll be happy with the decision they made. *

What I learned today, however, is that this might actually have some rational basis, as opposed to being merely a cognitive bias.

An uninformed consumer can be better off with a smaller choice set. The logic behind this possibility is as follows. A consumer who does not know which variety she likes must choose randomly among the available varieties. In equilibrium, the most popular varieties are introduced, so the average popularity of the available varieties is decreasing in the breadth of the product line. Consequently, the uninformed consumer's expected surplus is greater when there are fewer options.

*: Barry Schwartz, the author of The Paradox of Choice, notes that consumers are not negatively impacted if the choices can objectively arranged on a single scale. For example, when at a restaurant, and presented with the seemingly infinite set choices: {1 pizza slice for $1, 2 pizza slices for $2, 3 pizza slices for $3, etc.}, the consumer is able to collapse this infinite set to represent a single choice.

Contrast this versus the choice between pizza or hamburger. I further speculate that the Paradox of Choice (PoC) effect occurs even in the case of the choice of 1 pizza slice for $1, 2 pizza slice for $1.5, where the placement of the choices is not objectively clear on the axis (should the distance vary based on number of slices, or on price per unit?).

I suspect that there are in general 3 classes of choice: Those that can be set to a scale ("2 pizza slices for $2" is clearly the "1 pizza slice for $1" multiplied by 2); Those that can be sorted, but not scaled ("2 pizza slices for $1.5" is "more" than "1 pizza slice for $1", but we cannot say it twice as much, nor 1.5 times as much); and those that cannot be sorted nor scaled ("a hamburger" versus "a pizza"). Each of classes applies a greater PoC effect upon the consumer than the previous.