The hidden cost of keeping your options open

Photo by visualpanic

Photo by visualpanic

This spring, college students will be making decisions about the future. Whether “the future” means this summer, the next year, or the next five years, such decisions are always difficult, loaded as they are with the weight of opportunity costs. In these circumstances, a seemingly promising strategy is to maximize the possibilities you’ll have in the future. After all, isn’t college meant to open doors for you?

While it is true that college opens doors, a number of sources indicate that it is best to close most of those doors. Keeping your options open has a cost.

We keep options open for too long

In a 2004 study1, Dan Ariely designed a clever computer game to measure the effect of keeping your options open. In the game, participants (mostly MIT students) were presented with three doors. Clicking on one door took the participant into a room, and clicking inside the room gave the participant a certain amount of money. The amount of money varied randomly within some range, and that range depended on the room. At any time, the participant could also move to another room with one click. Thus, the game created a tradeoff between earning money (clicking in a room) and finding the best source of money (switching rooms). This was the “constant-availability” group.

In the “decreased-availability” group, participants played a modified version of this game. In this version, each room was shown as a door in the corner of the screen. For each click that a participant made in a room or on a door, the doors to the other two rooms would shrink. Clicking on a door would restore it to its original size, but if a door was not clicked on for 15 clicks, it would disappear forever. The participants were made aware of this condition when learning about the game. Thus, in this version, there was an added potential cost of losing options.

In the end, participants in the decreased-availability group switched about twice as much as those in the constant-availability group and did almost twice as poorly compared to the optimal strategy. Because they had to worry about permanently losing options, they vacillated between their choices more, which ultimately hurt them in the long run. The takeaway from this is that humans have a natural tendency to want to keep options open, which leads to suboptimal outcomes.

Keeping options open reduces our effectiveness

Photo by <a href="https://secure.flickr.com/photos/ninjanoodles/1586212326/">NightRStar</a>

Photo by NightRStar

As I’ve discussed before, the process of making decisions reduces our ability to work effectively. If you are trying to keep many options open, you will likely end up making more decisions about what to do.

For instance, a friend of mine is debating whether to do economics research this summer or look for an internship in finance. Since he is unsure of his course of action, he has an extra decision to make, which uses up valuable time and energy.

But if you really don’t know what to do, can making a random decision really be ideal?

Some people, like Cal Newport, might even say yes. (Cal Newport’s argument is a bit involved, so I won’t discuss it in this post.) I personally think that there is some value in collecting more information. However, I also believe that human nature makes us err on the side of keeping options open, to our detriment. As such, I encourage you to think carefully about the options you are keeping open and whether or not you’d be better off closing a few doors.

References:

1 Jiwoong Shin and Dan Ariely (2004), “Keeping doors open: The effect of unavailability on incentives to keep options viable,” Management Science, 50 (5) 575-586.
2 Newport, Cal. “Beyond Passion: The Science of Loving What You Do”

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