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TOO MUCH INFORMATION
The next time you visit your local supermarket, look around at the sheer variety of products on offer. Britain’s Tesco carries 91 different shampoos, 93 types of toothpaste, and 115 household cleaners (The Tyranny of Choice, 2010). The average American supermarket carries almost 50,000 items, more than five times the number available in 1975. If you think this is a lot of choice, consider the Internet, which features products from all the world’s supermarkets, bookstores, electronic stores, clothing stores, and movie theatres. Not just products themselves – we now have access to more information about these products than ever before. If you are interested in a car, you can go online to learn about features, user reviews, reliability records, ownership cost, retail prices, service quality, and recall history. If you want to see a movie, you can read hundreds of reviews on Rotten Tomatoes and browse thousands of titles on Netflix. If you’re looking for love, you can join dating websites for every taste and persuasion, with millions of new members signing up all the time. The Internet has vastly expanded our horizons, from a world of limited choices bounded by our physical location to a world of virtually infinite choices. But does all this information about choices really benefit us?
From a broad economic perspective, it could be argued that giving people more information is a good thing. Choice is the basis of free markets, driving competition and economic growth. At a personal level as well, choice gives us the power to pick products and services that best fit our needs. The process of choosing helps us understand our preferences and satisfies our need for variety. Choice gives us a sense of control, which is fundamental to our well-being as individuals. And from a social point of view, choices help us signal our identity and broadcast our status to others. The clothes we wear, the brand of beer we drink, and the car we drive tell others whether we are bankers, plumbers, artists, students, or hipsters; how much we earn; and what we value in life. All these benefits of choice are important. But if we look more deeply, we can see hidden dangers in a world of too much information. In fact, research has shown that too much information is bad for us in four important ways: choice paralysis, choice shortcuts, post-choice dissatisfaction, and barriers to learning.
Choice Paralysis
Imagine you’re in the ice cream aisle of your local supermarket. As you peer into the freezers, you see different flavors, brands, and packages – chocolate, caramel, praline, strawberry, mango, lychee, and coffee; gelato, sorbet, and frozen yogurt; soya and milk; Häagen-Dazs, Nestlé, and Ben & Jerry’s; tubs, sticks, cones, and cookies. How do all these options affect our decision to buy ice cream? A research study looked at this situation and found that having too many choices can paralyze people into postponing their decisions (Iyengar, 2011). Researchers in this study set up a booth in a California gourmet market with a display of Wilkin & Sons jams. Every couple of hours, they changed the display from a large selection of 24 jams to a smaller selection of 6 jams. The researchers then tracked the percentage of market visitors who stopped at the booth and the percentage who bought jams there. They found that a larger assortment of jams attracted more customers to the booth, with 60 percent of visitors stopping to look at the larger selection but only 40 percent stopping at the smaller selection. More interestingly, they found that only 3 percent of people who stopped to look at the larger selection of jams actually bought something, whereas almost 30 percent of customers who stopped at the smaller selection bought at least one jar of jam. Similar studies with wine, chocolate, and retirement plans have reached the same conclusion: offering too many options can lead to choice paralysis whereby many people walk away without picking anything. And even when they do buy, people faced with excess choice spend an inordinate amount of time making up their minds. These findings have important implications for consumers and firms. If consumers are paralyzed by too much choice, they will waste valuable time on the choice process – time that could have been better spent on more productive and pleasurable activities. And if excess choice reduces consumer purchases, then the plethora of choices on the Internet could reduce rather than increase sales for firms.
Why do too many choices lead to choice paralysis? Researchers have proposed three explanations based on regret, anxiety, and effort. According to the regret explanation, having a lot of choice makes it easy for us to imagine that our selected option is worse than the options not chosen. For example, we may think fondly about the flavors of jam or ice cream passed over, the faster car forgone, or the hotel room with the better view rejected. One way to avoid this regret would be to simply not choose, since there are no forgone options if there is no choice. It doesn’t help that review websites often highlight the top product in every category: best hotel, best laptop, best TV, and best family sedan. If we haven’t chosen one of these top-rated products, it is easy to feel that we have made a mistake. Of course, “best” is often a subjective judgment and what is best for others may not be right for us. But we often don’t see it that way and postpone choices to avoid being stuck with a suboptimal product.
Another way to avoid regret is to choose after so much deliberation that we can tell ourselves we have chosen the best option. Putting aside the value of lost time and the impracticality of thinking about every decision in painstaking detail, there is a hidden cost to ruminating about choices. Research has shown that thinking about choice options creates a sense of attachment towards all the considered options, which makes it difficult to pick only one. Imagine you are shopping for a new car and have narrowed your choices to three brands: Mini Cooper, Mazda Miata, and Fiat 500. The more you think about these cars – each with its unique design, quirky personality, and glowing user reviews – the more painful it will be to choose only one, since this implies you must give up the other two cars to which you have become psychologically attached. In this way thinking about choices can make choosing feel like losing (Carmon, Wertenbroch, & Zeelenberg, 2003).
Another explanation for choice paralysis is that too much information creates anxiety, and one way to reduce this anxiety is to avoid choice altogether. Product packaging, especially in the case of food and medicine, often lists both positive information about product benefits and negative information about harmful ingredients or side effects. As the amount of package information increases, the amount of negative information also increases, which can create anxiety during choice. I observed this anxiety effect in a research study where I showed two versions of food packaging to consumers (Hansen, Mukherjee, & Uth Thomsen, 2011). The packages differed in terms of nutritional information – some packages had a long list of ingredients including fat content, calories, vitamins, minerals, food coloring, preservatives, stabilizers, and flavoring agents, while others had a shorter list of main ingredients. I found that those who saw packages with more detailed information reported feeling more anxious, suggesting that exposure to more product information can create anxiety during choice.
Trade-off difficulty is another reason for anxiety during choice. We often make trade-offs – sacrificing our waistline for the melt-in-your-mouth taste of a Krispy Kreme donut; lower quality for the lower price of a second-hand car; or lesser environmental friendliness for the greater effectiveness of a harsh household cleaner. These trade-offs can create anxiety, since we are often unsure about whether we are making the right sacrifice for the right gain. Some trade-offs are especially difficult – think about giving up safety features for a cheaper car, or choosing a more effective heart medication with a chance of serious side effects. With such trade-offs, there are substantial risks in the form of lower safety or harmful side effects, which can create anxiety. Postponing choice allows us to avoid trade-off anxiety, since there are no difficult trade-offs to be made if there is no choice.
Researchers have used a brain imaging technique called fMRI – functional magnetic resonance imagery – to demonstrate that too much information creates anxiety during choice. fMRI machines use magnetic fields to measure blood flow and activation in different regions of the brain associated with feelings, thoughts, and behavior. One fMRI study investigated the effect of excess information while choosing by measuring brain activity during combinatorial auctions (Dimoka, 2010). Combinatorial auctions are complex bidding wars where many options can be bought separately or bundled together, such as airline landing slots being bid for by airlines. The challenge is to buy the combination of options you want at the lowest price, which is a difficult task if you are considering, say, 100 landing slots at the Toronto airport. As the number of options increases, the amount of information that bidders must juggle increases exponentially – passenger load, weather, and connecting flights – which makes the bidding process very complex. Participants in this study were asked to bid in combinatorial auctions for airline landing slots while their brain activity was scanned by an fMRI machine. When the auction started, there was increased activity in the dorsolateral prefrontal cortex, the region of the brain responsible for rational decision-making. As the auction proceeded and information piled up, activity in this region dropped off and instead, regions of the brain related to emotion lit up. It was as if a circuit breaker had tripped due to a surge of anxiety and, when this happened, participants took longer to make decisions and started overpaying for options worth far less. Our brains misfire with negative emotion when we are overwhelmed by too much information, and our decisions suffer as a result.
A third explanation for choice paralysis is that people are “cognitive misers,” looking to reduce mental effort during decision-making (Bettman, Luce, & Payne, 1998). We are receiving information all the time from our surroundings – social conversations, traffic, television, email, telephone, text messages, books, music, newspapers, and websites. This information is constantly changing and arriving through different channels of perception: sight, sound, taste, smell, and touch. We would need a supercomputer in our heads to thoroughly process all this information and make optimal decisions on a moment-to-moment basis. Instead, our minds often simplify matters by postponing choices that require too much thinking. This is akin to triage in hospitals – since doctors cannot see everyone at once, they keep some patients waiting to focus on others with more serious symptoms. Similarly, our minds keep some choices on hold to allocate limited mental resources to more important tasks. The California jam study discussed earlier is a good example of this process – most shoppers walked away without buying anything because it was simply too much effort to compare 24 different brands, flavors, and sizes before buying something as mundane as a jar of jam.
Choice Shortcuts
People often navigate the world of excess information by using choice shortcuts. When we see a wall of ice cream at the grocery store, we can cut through the clutter by going straight to our favorite brand and flavor. When shopping for detergent or toilet paper, we use shortcuts such as buying the brand most familiar to us or the brand we bought last time. Research has found that people often use brand names as choice shortcuts, especially in markets with many competing brands (Hoyer & Brown, 1990). From Levi Strauss in the nineteenth century to Apple today, familiar brand names have always served as a badge of quality and a shortcut to choice. This is why firms spend heavily on branding and jealously guard their brand equity – brands bind customers with invisible chains of assurance and convenience in a world of excess information.
Food is an especially important choice because we all need to eat, and food choices have implications for health, household budgets, and personal well-being. How do people make food choices? What kinds of shortcuts do people use when buying food? I investigated these questions in a study where I presented consumers with two packages of frozen dinner: one package had a fictional health certification called “Heart Healthy” stamped on it, while the other package did not (Mukherjee, 2017). I simply asked participants to look at the two packages and pick the one they liked more. Not surprisingly, most participants in the study picked the “Heart Healthy” dinner. I then wondered if choosing on the basis of health certifications like “Heart Healthy” could hurt consumers, perhaps by making them overlook harmful product information on the package. So I modified the “Heart Healthy” packaging by adding unhealthy ingredients such as trans fat, preservatives, and stabilizers. Surprisingly I found this made no difference, with most people still picking the product with the prominent health certification despite the fact that it now had several harmful ingredients. It seems that consumers use the choice shortcut of prominent information on the label rather than detailed information at the back of the package, and this choice shortcut can mislead customers into making bad food choices.
Another common shortcut is to choose products on the basis of reviews posted by others on websites such as Yelp, TripAdvisor, or CNET. A majority of consumers around the world now consult product reviews before making purchase decisions, and this number has been increasing over time (Nielsen, 2015). There is an important problem with reviews, however, which is that different reviewers often have different opinions about the very same product. If you look up movie reviews on Rotten Tomatoes, you will see that many movies have mixed reviews: some people like them, others hate them, and yet others are in the middle. How can we use reviews when they are all over the place? Should we focus on the positives, the negatives, or the neutrals? One way people solve this problem is to look only at the average rating and ignore the variance in ratings across reviewers. Another common approach is to rely on one’s “favorite reviewers” and ignore the others. These favorite reviewers are sometimes called opinion leaders, and research shows that people choose opinion leaders in different ways. We sometimes choose opinion leaders based on expertise, such as when we take the advice of professional critics for movies, music, or restaurants. At other times, we pick opinion leaders based on popularity, such as the number of likes or thumbs-up from other consumers. And we sometimes pick opinion leaders based on perceived similarity, such as movie reviewers who most resemble us in terms of age, gender, or education.
As with any choice shortcut, relying on opinion leaders can sometimes lead us astray. I learned this the hard way because I love watching movies and often seek out recommendations from friends, family, and online reviewers. I realized after many disappointments that recommendations are tricky – just because someone insists that I must see a movie doesn’t mean I will like it. Others I talked to also said the same thing, namely that their favorite reviewers sometimes let them down by recommending bad or mediocre movies. When I discussed this issue with my research collaborators, we had an idea – perhaps people use a flawed method to select their favorite reviewer, and this makes recommendations from favorite reviewers less useful. To explore this issue, we conducted a study where we asked students in our classes to consider two movie reviewers, say John and Paul (Gershoff, Mukherjee, & Mukhopadhyay, 2007). We told students to imagine that John matched them on previously liked movies, while Paul matched them on previously disliked movies. As a concrete example, John was said to have liked the same 20 movies as them, while Paul had disliked the same 20 movies as them. We then asked students to pick either John or Paul as their preferred movie reviewer. We found that most students picked John as their preferred reviewer, indicating that the students were using a choice shortcut of picking the reviewer who had been good at predicting their past likes. Of course, this shortcut would backfire when it is more important for the reviewer to predict our dislikes. For example, when many mediocre or bad movies are being released, reviewers’ main job is to steer us away from movies we would dislike. Another situation where this shortcut can backfire is when our tastes evolve over time, and we no longer like the movies that we liked in the past.
So far we have seen that people use familiar brands, health certifications, and opinion leaders as choice shortcuts in a world of excess information. Other shortcuts are also widely used during choice. For example, people often choose between similar options by selecting a dissimilar, albeit inferior, option (Redelmeier & Shafir, 1995); selecting a neutral option (Nowlis, Khan, & Dhar, 2002); selecting the option described as having more features (Shafir, Simonson, & Tversky, 1993); or selecting the option that is easiest to justify to others (Sela, Berger, & Liu, 2009). When choosing the amount of food to put on their plate, people use shortcuts such as the size of their plate, amount of food taken by others at their table, and the body weight of diners at surrounding tables (McFerran, Dahl, Fitzsimons, & Morales, 2010). The larger the plate, the more food others at the table are eating, and the heavier the surrounding diners, the more food we are likely to put on our own plates. These shortcuts during food choice are dangerous because they represent mindless rather than mindful eating, which could lead to weight gain and health problems over time.
People use shortcuts when searching for online information on Google or Bing. When we type in a search term, the results are ranked with the more relevant websites – according to the search engine – displayed on top. Research has found that people focus mainly on the top-ranked search results and largely ignore the rest. In one study, researchers asked voters in the 2014 national elections in India to google information about three politicians (Epstein & Robertson, 2015). Different groups of voters were shown different search results – the top-ranked results in the first group linked to web pages favorable to the first politician, while the top-ranked results in the second and third groups favored the second and third politician respectively. It turned out that voters’ opinion of politicians was determined almost entirely by the top-ranked results. This was especially true of uncommitted voters, and these voters also expressed a higher intention to vote for the politician with top-ranked results. Closely fought elections in many countries are decided by uncommitted voters. If uncommitted voters use search shortcuts rather than thoughtful analysis to make voting decisions, the democratic process can be subverted by candidates who have optimized their search ranking over those who have a better agenda for the country.
An important effect of choice shortcuts is that they entrench the dominance of big brands in the marketplace. Despite the thousands of new movies released every year, the lion’s share of movie profits are made by a few heavily promoted blockbusters and sequels that rely on name recognition to sell tickets. For example, there were 558 films released in North America during 2009, most of which failed to make a profit; this was also the year when Avatar became the highest grossing film to date. Franchises like Superman, Spiderman, Avengers, and Star Trek are moneymakers because many people use a well-known franchise, movie star, or movie award as a shortcut for deciding what to watch at the multiplex. As a result, brands with high awareness – because they have been successful in the past, present in the market for a long time, or advertised more heavily – are likely to have an inherent advantage in a world of excess information.
Post-Choice Dissatisfaction
Too much information can lead to “buyer’s remorse” or post-choice dissatisfaction, where we end up regretting the choice we just made (Iyengar & Lepper, 2000). This is indicated by surveys showing that up to 40 percent of shoppers experience regret about a recently purchased product (Freeman, Spenner, & Bird, 2012). Why might we feel buyer’s remorse? One reason is that the more information we gather online about the products and services we own, the more likely it is that we will find other brands that look more attractive than ours in terms of features or price. This will make our own purchases look inferior in comparison and create feelings of dissatisfaction.
Another reason for buyer’s remorse is that too much information increases hedonic adaptation (Frederick & Loewenstein, 1999). Hedonic adaptation is our tendency to discount the value of things we have, compared to things we don’t have. This is why newly introduced versions of the iPhone or Xbox devalue the perfectly good versions of these products we currently own. And the more new products we see online, the more quickly we devalue the products we own. Too much information can also reduce post-choice satisfaction through exposure to negative word of mouth about the products we own. If we read reviews on CNET or Yelp about the new computer we just bought, we are likely to find at least a few negative reviews from other users. Since people have a tendency to focus more on negative than positive information, even a few negative reviews might convince us that the product we just bought is of inferior quality (Chan & Cui, 2011).
Barriers to Learning
People generally believe that more information is better than less; after all, that’s what they teach in school. But surprisingly, research shows that having easy access to lots of information can actually hinder our ability to learn. There are three reasons for this paradox: delegation of memory, memory biases, and memory scaffolding. We often delegate memory to other people, such as when we ask our partner to remember birthdays of friends and family while we take responsibility for paying the bills on time. Similarly, we have now started delegating our memory to the Internet by relying on Google Drive, Dropbox, Facebook, and Wikipedia rather than information in our own minds (Sparrow & Chatman, 2013). On one hand, it makes sense to rely on the Internet because there is virtually no limit on storage capacity, and information can be easily accessed with search engines. Relying on information from the Internet is also helpful because it lets us focus on creative tasks rather than rote memorization. On the other hand, relying on the Internet atrophies our ability to learn since we now make less effort to organize and understand information in our own mind. Because we no longer make an effort to mentally digest, we lose the ability to transform raw information into knowledge. This “Google effect” on memory was shown in a study (Sparrow, Liu, & Wegner, 2011) where participants were asked to copy 40 memorable statements into a computer (e.g., “An ostrich’s eye is bigger than its head”). Half of the participants were told that the information they were transcribing would be available online indefinitely, while the other half were told that the information would later be deleted. Participants were later asked to recall as many of the 40 sentences as they could. The researchers found that those who believed their work was being saved online were worse at remembering the sentences later than were those who thought their work would be deleted. The more we rely on the Internet to remember things for us, the worse we are at remembering things ourselves.
The surfeit of information online can bias our memories of facts and events. A well-known memory bias is the familiarity-truth effect, as expressed in the saying “repeat a lie a thousand times and it becomes the truth.” This is why firms sometimes pay people to post false positive reviews about their products on review websites. Consumers who repeatedly see positive reviews will come away with the impression that the reviews are probably true and the product in question works well. The familiarity-truth effect also explains why rumors become stronger when they go viral on the Internet – people mistakenly believe that something they read many times on the Internet must ipso facto be true.
The power of rumors is further enhanced by another memory bias called the sleeper effect. This is the tendency for people to remember something they heard longer than the identity of the person who said it. In other words, people remember claims better than the person who makes the claims. Because of the sleeper effect, even claims made by unreliable or unknown people on the Internet can take on the patina of truth over time because people tend to forget that they heard the claim from an unreliable source in the first place.
Our memories can be biased by the speed with which search results are served up on search engines: the quicker search results are delivered, the more knowledgeable people think they are about the topics in question. This was shown in a study where people took part in a trivia quiz (Galinsky, Ku, & Wang, 2005). One group of participants completed the quiz without the help of the Internet, while the other group was allowed to use the Internet to find answers to their questions. Participants were then asked to state how knowledgeable they felt about the topics in the quiz. The researchers found that people who completed the quiz using the Internet felt more confident about their knowledge of the topics in the quiz than did those without Internet access. Furthermore, people who overestimated their knowledge also predicted that they would do better in a second quiz without help from the Internet. This study suggests that merely having access to the Internet is enough to make us feel smarter, even though we may not actually be an expert on the topic in the absence of the Internet. Interestingly, this overconfidence bias seems to increase with faster Internet access. In a follow-up study, the researchers found that broadband users with fast Internet access were more confident about their knowledge than users of slower dial-up Internet. Faster Internet access – and hence a shorter waiting period – gives people less time to think about their actual knowledge and strengthens the illusion that information on the Internet is knowledge we possess in our brains.
Yet another drawback of keeping information on the Internet is that it removes the memory scaffolding required for learning. When we are trying to learn new things – be it cooking, music, languages, or mathematics – we need to first erect a basic framework of knowledge and then add new information around this framework. This “framework-first” approach is as true for learning as it is for building a house or a bridge: the framework provides the skeleton, which is then fleshed out into a complete structure. Keeping information externally on the Internet rather than in our minds leaves us without the internal knowledge skeleton we need to assimilate new information effectively. As a result, outsourcing information to the Internet can undermine our ability to learn.
What Can We Do?
We can take three steps to minimize the negative effects of too much information on the Internet: satisfice rather than maximize, delegate choice, and use decision tools.
Satisfice, Don’t Maximize
The message we constantly get from society and the world of advertising is that we should aim for the best – the biggest house, the most prestigious job, the fanciest vacations, and the best car. Of course it is good to be ambitious, but aiming for the best all the time might be counterproductive when making choices in life. Broadly speaking, we can approach life with either a maximization goal, where we seek to make the best possible choice, or a “satisficing” goal, where we are satisfied with a “good enough” choice. Research shows that having a maximizing goal during choice increases post-purchase regret and reduces satisfaction with the products we choose (Schwartz et al., 2002). In this research, people first filled out a questionnaire that measured the extent to which they were maximizers or satisficers. People then reported their regret about recent product purchases as well as their overall happiness with life. The researchers found that maximizers expressed more regret and lower life satisfaction than satisficers.
Another study found that maximizers feel worse about their decisions than satisficers even when they make objectively better decisions (Iyengar, Wells, & Schwartz, 2006). This study followed graduating college students during their job search process and subsequent working life. Students who were maximizers did better initially in terms of getting a higher starting salary, but they fared significantly worse later in terms of job satisfaction. Why did this happen? One reason could be that maximizers focus on quantifiable things such as money and prestige when choosing careers, at the cost of things that are less quantifiable but more important in the long run, such as job satisfaction and social impact. Perhaps we might be better off adopting a satisficing approach towards many of our daily choices and reserving a maximizing goal for only a few important choices. Even for these important choices, it might make sense to use a satisficing approach for shortlisting an initial set of options, and then switch to a maximizing mindset for making the final choice. There is a lot of wisdom in the saying “don’t sweat the small stuff, and it’s mostly small stuff.”
Delegate Choice
We can manage excess information by delegating choice. We normally think about choice as a comparison of brands and their features, followed by selection of the best brand. But we could also think about choice more broadly in terms of when to choose versus when not to choose; when to let others choose for us; how many alternatives to consider; and how much time to spend on the decision-making process. When the decision is highly complex, we could let experts like doctors and lawyers make decisions for us. We could routinize regular decisions such as what to wear for work by adopting a standard look for each day of the week – if it’s Monday, it must be blue shirt with red tie, black turtleneck with jeans on Tuesday, and so on. We could set up rules in advance that simplify decision-making in the grocery store, such as “consider no more than two brands in each product category, and make a decision within 10 seconds.” We should not look at grocery flyers after we have finished shopping because then we might learn that we should have bought something else or shopped somewhere else. These techniques will help us by delegating choices to other people or to automatic rules set up in advance.
Decision Tools
We can improve our choices by using decision tools. Wine stores often publish notes to educate buyers about the taste profiles of wines and suggested food pairings. These tasting notes are decision tools – tools to help us better understand what we like and dislike. Decision tools are especially important for products like wine, a market where people are relatively uninformed and don’t know what to look for (Hoeffler, 2003). A particularly useful preference learning tool available in the form of software is called conjoint analysis (Ding, Grewal, & Liechty, 2005). Imagine you are thinking of buying a new home. If you use conjoint analysis software, you will be asked to choose between homes with different combinations of features, say a more expensive home with more bedrooms versus a less expensive home with fewer bedrooms; or a larger home with a longer commute time versus a smaller home with a shorter commute time. As you can see, these choices represent trade-offs between different features – price, number of bedrooms, floor area, and commute time. The trade-offs you make through your choices are analyzed by the software to quantify which features of homes you value more and which less. Your choices will also reveal the ideal combination of features and price that is your personal “sweet spot” for a home. Armed with this precise knowledge about your own preferences, you can proceed to buy the home which is right for you, one that satisfies both your heart and your wallet.
Product filtering tools can be an effective ally against too much information. Travel websites such as Expedia allow us to filter airline tickets by price or flight connections so that we see only options below a certain price or with fewer than a certain number of connections. These filters reduce the number of options we need to consider, thus reducing information overload during choice. Similarly, websites that compare multiple brands and features on the screen at the same time simplify choices by making it easier to compare options side-by-side on features important to us. We could use recommendation agents such as those offered by Amazon or Netflix that give suggestions based on our past history of purchases and the purchases of those similar to us. When we are unsure about what to buy, we could save time and effort by simply accepting suggestions from recommendation agents. Indeed, research shows that using recommendation agents reduces search effort, increases decision quality, and increases satisfaction with choice (Dellaert & Häubl, 2012). And finally, using recommendation agents can lead to serendipitous discoveries of new movies, books, or music that we might never have come across had we stuck to our past pattern of choices.