Economists have a funny way of looking at the world. They like to create models where consumers (we can call them “people”) will make decisions based on rational comparisons and decisions. A lot of times, the results are elegantly useless at predicting things on a broad scale (remember the “Laffer Curve?”). However, when it comes to “small” interactions, the calculus of rational thought can be found to be eerily effective at describing human behavior.

For example, suppose I offer you one of two things. Thing 1, is $100. Not bad, right? But wait, there’s more. Thing 2 is a chance at $200, but it’s based on the flip of a coin. Heads you get $200, tails you get nothing. Which do you want? More importantly from my point of view, why?

You might think that this is one of those person-defining questions. Like, is the glass half empty? Or is the glass half full? Or maybe you’ve got subjective expected utility on your mind based on some psychology course you took as an undergrad, and your think that a 50% chance of winning $200 is subjectively the same thing as $100.

Well, according the economic rule of rational thought call the “law of diminishing marginal utility,” you will pick the $100. Why? What does this law say (and/or Why is it saying I’m irrational because I just picked the $200?) The law of diminishing marginal utility says that the difference between $100 and $0 is bigger than the difference between $200 and $100. That’s right, it’s MATH. Based on this calculus, you would need to be offered $240 before both alternatives would have equal value.

However, what this calculus of value completely ignores is how satisfied you will be with your decision. If I offered you $100 for reading this blog, I bet you’d be pretty satisfied (and tell your friends!) However, if I made the above offer to you, unless you choose the gamble and win, you would probably be less satisfied with the outcome. The reason for this is obvious: Unless you take the gamble and win, you will be aware that you either (a.) missed the opportunity of winning more by not trying, or (b.) missed the opportunity of a significant reward by gambling for a larger reward. In other words, the calculus of satisfaction is based on perceived trade-offs.

In his book “The Paradox of Choice,” psychologist Barry Schwarz has argued that when people are faced with having to choose one option out of many desirable choices, they will become emotionally bogged-down in the hypothetical trade-offs. Their options and/or the outcomes of their choices, are evaluated in terms of missed opportunities rather than the value of the option pursued. Schwartz maintains that a perseveration on missed opportunities impedes our ability to choose, and lowers the level of satisfaction we experience from our decisions. In other words, when it comes to being happy with what you have, less may actually be more. The mind somewhat reels at how this logic may explain the almost bizarre level of conspicuous consumption that America’s new “mega-rich” are engaged in on a daily basis (have you seen a picture of Paul Allen’s yacht?)

Now, here’s my thought-experiment for the day: If less is more when it comes to satisfaction with our life choices, how can we see this factor play out in the success of people engaged in the search online for a date or mate? One of the hallmarks of online dating is the large number of “potentials” with which users are presented. Does this plethora of opportunity really translate to an emotional hurdle to being able to commit to any one possibility?