Everyday we are faced with choices: the choice to wake up in the morning, drive or walk to school and even whether to go to class. More finitely, should we take notes with a pen or pencil? Should I be writing this blog and should you be reading it? The choices we face routinely are endless. Often we take the freedom of choice for granted. More importantly, the choices we make determine our future. Opportunity cost, indecision, regret, and comparison all factor in choices we make.
Every choice has an opportunity cost. An opportunity cost refers to the potential gains you are giving up by choosing an alternative option. When making a choice, we subliminally weigh opportunity costs of each choice. If I go to class I will learn and proactively take part in my education to better myself for a future job. If I skip class, I will go skiing and enjoy the deep powder with friends to increase social gain. The opportunity cost of skiing is missing out on my education and vise versa. What about time and money; to do something yourself or to pay someone? If changing your oil cost you 4 hours of your time or $40 to pay a mechanic, what is the opportunity cost? In 4 hours you could be working at $15 per hour making $60. In this case you would be better off paying a mechanic and still having $20. What if it is a Saturday and work is out of the question. Is 4 hours of your time hanging out with friends more valuable than $40? This is the opportunity cost.
Another interesting factor of choice is indecision faced when multiple options exist. Frequently, consumers do not close doors on options due to the fear of regret. If you are faced with the option of a buffet table, you may choose a little of everything. Even though you love the bbq chicken, you take some turkey and pork to optimize your potential gains. Nobody wants to miss out on anything. This also comes into play on your weekend and you begin planning activities with your friends. When asked to go skiing with Tom, to watch a movie with Sarah, and to go to a party with your intramural soccer team, we may find it very hard to say no to any of these opportunities and rather than focusing and enjoying one option to the fullest, we do a little of each not fully engaging in any of them. We fear regret of missing out. This is interesting as we may potentially have more positive gain from spending the entire day with Tom skiing rather than busily showing up to each activity.
Lastly, comparison influences every choice we make. Was the powder at Bridger Bowl good or bad? As consumers, we all have a set standard relative to everything we come in contact with. Skiing today compared to last year’s 20 inch pow day, dinner at home compared to going out to eat and significant others of the past compared to the present. By comparing experiences, we set standards for the choices we make. If we expect a certain result, we may end up satisfied or extremely dissatisfied. If a friend tells us a restaurant is great, we have a heightened level of satisfaction for the food whether it truly was great or not. Comparison comes into play most frequently when the amount of options we face is too large to gather all the information we may need to make a proper decision. Rather than taking the time to learn about hundreds of options of potential wines for sale, we may look to our peers for what they are doing and choose accordingly. We are comparing our choices to others and ultimately letting them choose for us.
The epitome of choice comes down to the critical standards we set for ourselves without truly understanding. Next time you make a choice consider the opportunity cost, the effects of indecision and regret, and the power of comparison and its manipulation. Choices are what make us free, yet the psychology around them may be ironic.