Information and decision making
The fact that we live in an age of information should allow us to make super-informed, data-driven decisions all the time.
But the widespread availability of information does not mean that we actually use it even if we have it: decades of research in psychology and behavioral science found that people readily make data-poor snap judgments in a variety of instances (when forming impressions, when shopping, when evaluating, even when voting).
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Individuals fail to anticipate how little information they and others use when making decisions.
An the immediacy of human judgment generally surprises people: we are startled by how quickly we make judgments and how little information we use doing so.
We fail to anticipate how little information we (and others) use when making decisions.
The immediacy of human judgment generally surprises people: we are startled by how quickly we make judgments and how little information we use doing so.
New information doesn't stack on top of old information until some mental threshold is reached for making a decision.
In reality, the first few pieces of information are weighted much more heavily than later information.
Quick decisions are not always bad. Sometimes they even are remarkably accurate and can save time.
It would be overwhelming to comb through all the available information on a topic every time a decision must be made.
Misunderstanding how much information we actually use to make our judgments has important implications beyond making good or bad decisions.
An example could be our tendency to rely on stereotypes when judging other people: we may believe we'll consider information from all the angles, but in fact, we are more likely to consider very little information and let stereotypes creep in.
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In a comprehensive study, many people were asked about the time taken for them to make decisions regarding their life partner, their choice of beverage, and evaluation of various kinds of data. In all of the cases, there was a false belief in the individuals that they would utilize more information than what they eventually did.
A common occurrence of heuristics in which we use an initial starting point as an anchor that is then adjusted to yield a final estimate or value.
Example: estimating the value of an object based on the common price of similar objects.
- Successful decision-making relies on a balance between deliberate and intuitive thinking.
- Opt for less information; stick to only what is essential. We may feel more confident when doing a lot of research, but this could lead to indecision and analysis paralysis.