Sheena Iyengar
Appearances
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
Let's see what kind of candy bars they have. They usually have cool candy bars. Let's see what kind of deals they might have on wines or cheeses. Are their prepared food sections kind of cool? What might they have that could add some more variety to the house?
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
I've been at the Columbia Business School since 1998, and I started to study choice way back in 1990.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
And I got very interested in the kinds of questions that we wouldn't have ordinarily asked, like, well, do all cultures see choice in the same way? We had assumed that it was innate. We had assumed that everybody saw it the same way, that it was somehow universal. And I think because I was an Asian American, I didn't see it as that obvious.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
I started by looking at white American kids because I had to first show that I'm capable of actually replicating what prior scientists would say.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
The white kids would come in and they would look at all these toys. and stare outside the window. And then when I would just give them Legos, they were really happy and they were playing. And I was like, wait, this goes totally against what I'm supposed to find. There's something wrong here.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
Why were they staring out the window? I don't get it. I gave them really, really cool toys. I gave them all the most modern toys. At the same time, I was going to this upscale grocery store.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
So they had like 250 different kinds of mustards and vinegars and mayonnaises and 500 different kinds of fruits and vegetables and 100 different kinds of olive oils. And oh my God, it was amazing. And I would go to all these little tasting sessions and try out like 10 different kinds of vinegars. And I also then thought to myself, well, how come you never buy any of those things you taste?
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
And I then went to the store manager and I asked him whether his model of offering people all this choice was working. Now, he said it did. And he pointed to the traffic. And this store did have a lot of traffic. But it was still an empirical question. Was it helping or was it not?
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
And we looked at two things. First, we looked at in which case did more people stop to sample some jam. And we found that more people stopped when there were 24 on display. So 60% stopped when there were 24 on display versus when there were six on display, only 40% of the people stopped. And then when people stopped, we gave everybody a coupon giving them $1 off if they bought a jar of jam.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
And in the back of the coupon was a code that told us if they saw 6 versus 24. Now, what we found was that of the people who stopped when there were 24 on display, only 3% of those coupons were redeemed. Whereas of the people who stopped, when there were six on display, 30% of the coupons were redeemed.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
Trader Joe's. I do love Trader Joe's.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
With the finding illustrated, we said we want more choice, presumably because of all the opportunities it provides us. But when it comes down to making a choice, we don't want that choice to be too hard or too conflict-ridden or too burdensome.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
And essentially what we found was that the plans that offered their employees more options, you saw a real decrease in participation rates. So if you had a plan that offered people less than five options, the likelihood to participate was roughly around 75%. And by the time you got to plans that offered people around 60 options, now participation rates had dropped below 60%.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
It doesn't overwhelm me. It usually gives me just a few choices per domain.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
They don't overwhelm you with choice, which is why you're more willing to examine each novel choice.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
It doesn't give me the boring stuff, right? It keeps me excited because I want to see what do they have and what do they have that might get me thinking about something I don't ordinarily think about. So they also maintain the mystery of novelty for me.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
Thank you. Thank you very much.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
I don't walk into Trader Joe's with a strong to-do list. It's not a chore. When I walk into Trader Joe's, it's a variety-seeking exercise.
Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
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Freakonomics Radio
Should America Be Run by … Trader Joe’s? (Update)
So I've been studying choice. Why do we want choice? What are the things that affect how and what we choose? And what are some things we can do to improve our choice-making abilities?