How It Happens: A Conceptual Explanation of Choice Overload in Online Decision-Making by Individuals

Choice overload is a phenomenon that can frequently occur in online decision-making by individuals. In this paper, we explain the concept of choice overload and explore the causes of choice overload by contrasting the characteristics of two distinct types of individual decision-making: the traditional search-dominated decisionmaking and the modern processing-dominated decision-making. By comparison, we demonstrate that choice overload is a phenomenon that happens in the transitional stage between these two modes of decision-making. As decision-making by individuals move to online environments, the traditional mode of decision-making that is characterized by high search cost and low processing cost is being gradually replaced by a different mode that has a low search cost, but very high processing cost. This transformation implies that a focus on effectively reducing processing cost will be the decisive factor in improving the effectiveness and efficiency of decision-making in online environments. The emergence of web-based product comparison agent is one step towards assisting online decision-makers to cope with choice overload. However, more substantial development in information technology, especially the advancement of theories in Human Computer Interaction is needed to significantly improve the quality of this kind of decision-making assistance.