We tend to think that if we only had more information, we’d make better decisions. The world, however, doesn’t always work that way. Paradoxically, More information often means that we make worse decisions.
When you want to make a good decision, your first action is most likely to collect more information. If you know more about the situation, you can make better judgments. Right?
Not always. Paradoxically, more information can lead us to make worse decisions.
One of the reasons we make worse decisions with more information is that we pursue information that appears relevant but isn’t. The harder the information is to find—that is, the more work we have to do to find it and the more exclusive is it—the more psychology tells us that we’ll put too much value on that information. In part, this happens because of our bias toward commitment and consistency; we’ve spent time and effort seeking out that information, so mentally, we feel obliged to use it. This nudges us toward decisions we otherwise wouldn’t have made.
We also over-value information that is easily obtainable, thinking that it possesses unique insights when, in fact, it’s nothing more than you’d find on the first page of Google. A little knowledge truly is a dangerous thing.
And yet, another reason we love irrelevant information is that we really lack fundamental understanding.
If we don’t understand something, we won’t have a firm grasp of the fundamental variables that govern the situation and how they interact, so we’ll look for new variables. When you’re not sure how to weigh one attribute compared with another, you end up searching for a reason.
Often this mountain of new information — even if easily obtainable – is largely irrelevant to the situation. The problem is we don’t know it is irrelevant.
“The result is that peculiar feeling of inward unrest known as indecision. Fortunately, it is too familiar to need description, for to describe it would be impossible. As long as it lasts, with the various objects before the attention, we are said to deliberate; and when finally the original suggestion either prevails and makes the movement take place, or gets definitively quenched by its antagonists, we are said to decide, or to utter our voluntary fiat in favor of one or the other course. The reinforcing and inhibiting ideas meanwhile are termed the reasons or motives by which the decision is brought about.”
— William James
Decisions are hard to make. In part, this is because of conflict and uncertainty. We are uncertain of the consequences of our actions and have difficulty making tradeoffs between attributes. Just as knowledge can make decision making easier, a lack of knowledge compounds the problem.
When faced with two choices of equal alternatives, Slovic (1975, 1990) suggests we make choices based on what’s easy to explain and justify. Sounds logical, right, why flip a coin when I can come up with a reason.
Sometimes we weigh the pros and cons. Subconsciously, when deciding for something, we focus on the pros, and when we decide against something, we focus on the reasons for rejection. This has the added advantage of giving us a good story to tell but causes problems when there are no striking positive or negative aspects to help make the decision.
When we can’t find a compelling reason to do something or avoid something, we are left in a state of conflict. So we search for more information.
“Seeking new alternatives usually requires additional time and effort and may involve the risk of losing the previously available options.”
— Amos Tversky and Shafir
The implications of my cobbled together theory seem worth considering.
If our current choices don’t give us a convincing reason to opt for a choice, we’ll likely seek out additional information (rather than questioning our understanding). When we do seek out additional information, we’re really just looking for a compelling rationale for choosing one alternative over another.
The more we look for a new rationale to make decisions, the further we are from understanding. The harder we look, the more we’ll find. The more we find, the more we’ll miss-weigh what we find. The more we miss-weigh, the more likely we are to make a poor decision.
So the next time you find yourself seeking out hard-to-find esoteric information to give yourself an edge in that important decision, think hard about whether you understand the fundamentals of the situation. The more esoteric information you seek the further you move from the likely variables that will govern the outcomes of the situation.