Whether buying a new car, hiring a job candidate or getting married, people assume they can and will use more information to make their decisions than they actually end up using, according to research from the University of Chicago Booth School of Business.
"Sometimes people need a lot of information to get an accurate reading, and sometimes people don’t need much information at all to get an accurate reading," said Assoc. Prof. Ed O’Brien of Chicago Booth. "The key insight revealed by our research is that it is hard to understand in advance which is which-people generally think that more information will be better, even when more information simply goes unused."
In the era of Google and Facebook, people may believe that exchanging ever-more information will foster better-informed opinions and perspectives when the reality is people are making snap judgments without even begin aware of it, according to a study in the Proceedings of the National Academy of Sciences. O’Brien co-authored the paper with Nadav Klein, who is a postdoctoral scholar at the Harris School of Public Policy.
In a series of seven studies, participants overvalued long-term product trials, overpaid for longer access to information, and overworked to impress others, failing to realize that extra information wouldn’t actually inform anyone’s judgment.
"In our studies, participants thought they would withhold judgment and await a lot of evidence before making up their minds, but in reality, they cast judgment right when the evidence came in," said O’Brien, whose research examines how people perceive and experience change.
In one study, researchers asked all participants to drink one 0.5-ounce sample cup of a novel vegetable drink. Then they randomly assigned some of those participants to predict how many cups they would need to drink to decide whether they liked or disliked the drink. The others were instructed to keep drinking the cups until they decided.
The participants over predicted: They thought they would need more sample cups than they actually needed to make a decision. The discrepancy held true whether participants ended up liking or disliking the drink.
In another study, the researchers asked MBA students to apply for a hypothetical management position and write the exact number of essays they thought a hiring manager would need to read to make a decision. Participants were informed that a real hiring manager would read the essays, and that too many or too few essays would cost them the job.
The researchers found applicants wrote more essays than the hiring managers read to make their decisions. Essentially, the students "overworked to impress," the authors wrote, adding, "Those looking to impress might be wiser spending their time fine-tuning some information rather than fine-tuning all information."
The data also suggest a gap between information seekers and information providers. For example, people who go online to research a topic or take part in a debate may only access a small fraction of what is available before making a decision, while providers of that information may assume the seekers are taking in all the information and "hear them loud and clear," the researchers wrote.
"Broadly speaking, we think this discrepancy is especially important in today’s information age, with more access to more information than ever before," O’Brien said. "People may think that so much accessible information will be useful for informing opinions and changing each other’s minds, without realizing that minds will be made up nearly right away."
--Story first appeared on the Chicago Booth website.
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