Too many daily deals! Groupon and choice overload

Thanks to the success of sites like Groupon and Living Social, daily deals have become a dime a dozen. An inbox full of deals poses its own difficulties. How do consumers deal with this new example of choice overload. How do behavioral scientists make sense of it? Chicago’s RedEye reports:

More deals on the horizon? That’s somewhat good news for bargain shoppers like Julie McDermitt, whose love-hate relationship with the daily deluge of deal emails is not uncommon.

“It’s sort of harder at this point to choose among them when you get so many,” said McDermitt, 27, a lawyer who lives in the South Loop. “Sometimes the thing you want to do is delete all because it gets so clogged up.”

But she doesn’t–the call of the deal is too great. Instead, she quickly scans the subject line opens the ones that catch her eye. She tends to gravitate toward restaurant or clothing deals.

“I think it’s annoying,” McDermitt said. But not so much that she’s willing to unsubscribe and risk missing out on a deal. “I guess I sort of set myself up for it by signing up for everything.”

To a standard economist, this story is pretty simple. McDermitt says she hates a clogged inbox, but she likes deals. She ultimately weighs the costs and benefits of getting those deals vs. unsubscribing from every site and sticks with the daily deal emails. In other words, ignore what she says and just look at what she does.

This is a pretty thin, unsatisfying explanation, though. A behavioralist takes McDermitt’s irritation about the flood of daily deals seriously. Her behavior comports with a good deal of work on anticipated regret. Previous findings in this area show that people make decisions that minimize regret. Even if McDermitt can’t know for sure what deals she’ll miss by unsubscribing, she figures there will be few–maybe a lot. It depends on how many good deals she’s gotten already. And if she’s got friends who subscribe to these sites and tell her about the deal they just snapped up, well, she’ll know exactly what she lost out on. That will really hurt. It all adds up to staying on those “annoying” mailing lists.

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