This is a Lexicon entry: the mechanism, when it shows up, and the countermeasure. The full correction, with real-world cases and the audit prompt, hasn't been written yet.
Definition
The difficulty individuals have in making a decision when presented with an overwhelming number of options. The famous "jam study": offering 24 jams attracted more browsers but sold far less than offering 6.
When it shows up
Too many nearly equivalent options: jam flavors, index funds, apartment listings, job offers that each have different trade-offs. Situations where the cost of comparing options approaches the cost of choosing wrong. Modern context: A B2B software vendor offers 14 pricing tiers to capture every segment. Conversion data shows the highest-converting competitor offers three tiers. The vendor's sales team reports that most deals stall at the pricing discussion - customers can't determine which tier is right for them.
Failure mode
The evaluation load of comparing many options exceeds the decider's capacity so the decision is deferred, defaulted or abandoned. No choice is made at all or a worse choice is made than if there had been fewer options.
Countermeasure
Pre-filter before comparing. Set two or three non-negotiable criteria and eliminate options that fail them before you look at the rest. Limit active consideration to three to five candidates. When correction costs more than the bias: When the person is a domain expert with well-developed preferences - experts benefit from larger choice sets and do not experience the paralysis effect that novices do. The overload correction applies primarily to unfamiliar domains and novice decision-makers.
Related traps
Also connected in the map4 more, locked
Credit & first seen
DiscoveredIyengar, S.S.&Lepper, M.R. (2000).'When choice is demotivating.'Journal of Personality and Social Psychology 79(6), 995-1006 source ↗
Also revealed
Entry #59 of 631 in The Lexicon · see the full Lexicon