Too Many Choices: A Model to Predict Open-Ended Consumer Decisions

Picture this: you’re about to go on your lunch break, hunger pangs nudging you toward a satisfying meal. But where to eat? The possibilities are myriad, a labyrinth of choices to navigate.

Everyday life seldom serves up straightforward decisions. Unlike the neat meals displayed on a restaurant menu, the decisions we encounter are often far from well-defined. Instead, we are presented with open-ended scenarios, leaving us to generate potential options ourselves. This overlooked phase of decision-making — a subtle yet significant process — often holds the key to optimal outcomes.

The Importance of Brainstorming and Memory

In “Retrieval-Constrained Valuation: Toward Prediction of Open-Ended Decisions,” published in the journal Proceedings of the National Academy of Sciences (PNAS), researchers propose a novel lens through which to perceive decision-making.

The mere act of brainstorming a range of potential alternatives, they say, significantly influences the quality of our decisions.

After all, “If a promising option isn’t conceived, it can’t be chosen, no matter how much it might align with your preferences,” said the lead author, Darden Professor Zhihao Zhang.

Confronted with a blank slate, the likelihood is that you’ll gravitate toward a brand that rings a bell, a name etched into memory, even if lesser-known options could be equally (or more) satisfying but don’t come to mind.

The researchers observed patterns in people’s behaviors — and brains, via MRI scans — across various decisions, such as choosing a lunch spot. They divided participants into two groups, one with a preset list of options, the other without.

“In the absence of a menu, participants frequently selected familiar joints like McDonald’s and Burger King — brands deeply ingrained in the minds of U.S. consumers,” said Zhang. “Less recognizable but still well-liked brands, such as Chipotle, were chosen much less when participants were required to devise their own options.” This was because consumers were not as likely to recall these lesser-known lunch spots — even when they preferred those spots.

A Model That Predicts

The study led to far more than observations on culinary decisions when choices aren’t handed to people on a silver platter. The researchers developed a computational framework for predicting decisions with remarkable consistency. The prospect of a model that illuminates the cognitive processes that underlie the navigation of open-ended decisions — and can predict them — holds great implications for both academia and practice.

Operating within a controlled laboratory setting, a test of this model achieved an accuracy rate of 90 percent, surpassing the researchers’ expectations and opening the door to a world of precise and predictive insights.

Quantifying the Value of Brand Awareness

Of numerous implications of the model, one example from marketing: How can the value of brand awareness be evaluated — or even predicted (a far more difficult and valuable feat)?

“This is something that all marketers strive for,” Zhang said. He noted that the model enables a quantifiable measurement of the benefits reaped by prominent brands like McDonald’s, Nike and Amazon, simply for holding leadership positions within their respective markets.

Beyond this rich-get-richer or prominence-breeds-prominence angle, the study addresses a longstanding challenge: forecasting the impact of advertising campaigns before they unfold. Historically, predicting campaign outcomes has been a formidable task laced with uncertainties. How to predict success? “But our study takes the first step to giving a more precise answer to that question,” noted Zhang. It means marketers can go a step beyond ad testing to determine how much of an increase in brand awareness might proportionally increase sales.