Numerical analysis of a time allocation model accounting for choice overload

The cost of time has been suggested as a factor associated with the choice overload problem. This term refers to the discomfort or paralysis experienced by individuals when facing a choice within a large set of alternatives, as it has been evidenced in experiments by behavioural and social psychologists. We introduce a rational model of time allocation to analyse how increasing the number of options of a given product may change consumer's allocation of time and in turn affect her welfare. Under some standard assumptions, the numerical analysis of the model reproduces two key experimental findings, namely choice paralysis - i.e. the choice problem is abandoned if the number of options is too large - and choice dissatisfaction - that is, the apparent paradox that increasing the number of considered options beyond certain limit, in turn choosing better, eventually diminishes welfare. The model analysis provides specific threshold values for the occurrence of both phenomena.