By: George Loewenstein

Published: October, 1999

Social Security Brief No. 7 ~ October 1999

Some people believe that more choice is always better. Choice does confer major benefits. It can satisfy people’s varied tastes and promote competition among providers that lowers price and improves quality. Studies of the psychology of decision-making find, however, that expanded choices can also impose costs on decision-makers. It can absorb scarce time that people would prefer to spend on other activities, result in decision errors, and produce anxiety and regret. Using proposals for Social Security reform as an example, this brief suggests that the costs can outweigh the benefits when new choices require expertise that people lack, introduce new risks when people want security, and require that people predict an inherently unpredictable future.

Keywords: Social Security

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