Barry Schwartz's book is one of the most influential books on the topic of choices. In this book, Schwartz uses insights from modern psychology to explore the relationship between our happiness and the complexity in life.

Highlights:

A consumer's strategy for most good decisions will involve these steps:
1. Figure out your goal or goals. The process of goal-setting and decision making begins with the question: "What do I want?" When faced with the choice to pick a restaurant, a CD, or a movie, one makes their choice based upon how one would expect the experience to make them feel, expected utility. Once they have experienced that particular restaurant, CD or movie, their choice will be based upon a remembered utility. To say that you know what you want, therefore, means that these utilities align. Nobel Prize winning psychologist Daniel Kahneman and his colleagues have shown that what we remember about the pleasurable quality of our past experiences is almost entirely determined by two things: how the experiences felt when they were at their peak (best or worst), and how they felt when they ended.

2. Evaluate the importance of each goal. There are rules of thumb that often lead us astray. Most people give substantial weight to anecdotal evidence, perhaps so much so that it cancels out expert evidence. The researchers called it the availability heuristic describing how we assume that the more available some piece of information is to memory, the more frequently we must have encountered it in the past. Salience will influence the weight we give any particular piece of information.

3. Array the options. Personal "psychological accounts" will produce the effect of framing the choice and determining what options are considered as subjects to factor. For example, an evening at a concert could be just one entry in a much larger account, of say a "meeting a potential mate" account. Or it could be part of a more general account such as "ways to spend a Friday night". Just how much an evening at a concert is worth will depend on which account it is a part of.

4. Evaluate how likely each of the options is to meet your goals. People often talk about how "creative accountants can make a corporate balance sheet look as good or bad as they want it to look." Most people are creative accountants when it comes to keeping their own psychological balance sheet.

5. Pick the winning option. Options are already attached to choices being considered. When the options are not already attached, they are not part of the endowment and choosing them is perceived as a gain.

6. Modify goals. Later, one uses the consequences of their choice to modify their goals, the importance assigned to them, and the way future possibilities are evaluated.

Psychological models for happiness showing how the problem of choice can be addressed by different strategies:
- Choice and Happiness. The current abundance of choice often leads to depression and feelings of loneliness. Americans are paying for increased affluence and freedom with a substantial decrease in the quality and quantity of community. What was once given by family, neighborhood and workplace now must be achieved and actively cultivated on an individual basis. The social fabric is no longer a birthright but has become a series of deliberated and demanding choices.  The author cites a study by Sheena Iyengar of Columbia University and Mark Lepper of Stanford University who found that when participants were faced with a smaller rather than larger array of chocolates, they were actually more satisfied with their tasting.
- Freedom or Commitment. How populations respond to unhappiness: they can exit the situation, or they can protest and voice their concerns. While free-market governments give citizens the right to express their displeasure by exit, as in switching brands, Social relations are different. Instead, we usually give voice to displeasure, hoping to project influence on the situation.
- Second-Order Decisions. Law professor Cass Sunstein uses the term "second-order decisions" for decisions that follow a rule. Having the discipline to live "by the rules" eliminates countless troublesome choices in one's daily life. These second-order decisions can be divided into general categories of effectiveness for different situations: presumptions, standards, and cultural codes. Each of these methods are useful ways people use to parse the vast array of choices they confront.
- Missed Opportunities. When people are faced with having to choose one option out of many desirable choices, they will begin to consider hypothetical trade-offs. Their options are evaluated in terms of missed opportunities instead of the opportunity's potential. One of the downsides of making trade-offs is it alters how we feel about the decisions we face; afterwards, it affects the level of satisfaction we experience from our decision. Recent evidence show how positive emotion has the opposite effect: in general, subjects are inclined to consider more possibilities when they are feeling happy.

[From the Great Books Series. Also see The Success Manual  - Encyclopedia of Advice, which contains summaries of 100+ Most useful books.]