Do people choose choice sets wisely? Evidence that people systematically err due to myopic thinking

Abstract: Our decisions about everything from who we’ll hire to what product we’ll purchase are often preceded by another decision: selecting a choice set (e.g. a recruiting website, streaming service, or restaurant menu), from which we’ll then pick our ultimate selection(s) (e.g. a job, TV show, or dish). Building on research on stereotyping and limited forethought, we show that when making these types of decisions between choice sets, people consistently fail to optimize. They over-focus on overall properties of sets under consideration and devote insufficient attention to what they will later choose from the set. This leads people to mistakenly select choice sets that have high average option quality, but lack the best overall option(s), causing them to miss out on the best outcomes. Across seven pre-registered studies (N=3,597), we highlight how consequential a lack of forethought can, particularly to the common class of decisions that involves selecting a choice set.

Keywords: decision-making, choices