How Much Information Is Too Much When Making Decisions?December 10, 2015
By Tony Kirwin, VP Operations / General Counsel
A couple things this week got me thinking about the sheer amount of information available on the world wide web of computers and whether it’s always a good thing.
It was early last Monday morning, about 3 a.m. A noise woke me up but, still groggy, I couldn’t place it. A few minutes later it happened again: a damned smoke alarm was chirping because the battery was low. I dragged myself out of bed, found the offending alarm, uttered a few curse words, pulled the battery, and yanked the thing off the ceiling. Of course everybody else in the house woke up during this process, as well. Always fun.
Determined to avoid the same fate the next night, I stopped by a drug store to pick up enough 9-volt batteries for every smoke alarm in the house. I stared at the battery display wondering how name-brand 9-volts could possibly cost three times as much as the generic equivalent. Does all that extra money just pay for marketing, or is there actually a performance difference? A quick Google search on my phone and a few clicks later I learned that studies have been done and the price per unit of power output is actually about the same. Generic batteries cost less but need to be replaced sooner. Over the long run there’s little price difference. This is a great example of readily accessible information leading to a quick decision that hopefully will mean fewer middle-of-the-night smoke alarm escapades.
On the other hand. Our coffee maker at home is on its last legs and, despite several sporadic hours of online research, I just can’t seem to make a decision and pull the trigger on a new one. I’ve read online reviews, I’ve scoured lists of “the best coffee makers,” and I’ve read articles about the virtues of K-Cups, pods, grinding your own beans, and optimal brewing temperatures. I’ve even gone as far as adding several coffee makers to my cart on Amazon, only to take them out. I’ll fully admit that there is more than enough information out there and way more than enough coffee-maker options. What’s more, the machine that’s on its way out is eight years old, cost about $35 and, compared to any of the new models I’ve looked at, probably makes a truly crappy cup of coffee.
So why the hesitation? What if I make the wrong decision about a new one!? What if the coffee from the new machine could have been better!? I certainly don’t do this all the time, but when there’s not an immediate need (the old coffee maker works for now) and I have time to make a substantial or lasting decision, I tend to avail myself of a lot of information so I can fully evaluate things and make what I think is the best decision possible. And, at least in this case, I do this knowing full well I’d be perfectly happy with nearly any of the coffee makers I could buy right now at Best Buy. So, is it worth it? Am I really going to be happier at the end of this process?
The coffee-maker situation I described is called maximizing — in short, obtaining all information possible to achieve the best possible outcome. There’s evidence that it often leads to better outcomes and can even lead people with high maximizing tendencies to such things as landing jobs with higher starting salaries. So, there are some benefits and reasons, I guess. But there’s also research suggesting that maximizers tend to second-guess their choices and ultimately are not happier than people who settle for the “good enough” option — satisficers. In short, maximizers often feel like they’re missing out on something better. And, as Dr. Barry Schwartz, the author of the The Paradox of Choice, says, “[One] of the things that life teaches you is that ‘good enough’ is almost always good enough.”
There’s also evidence that too much information can lead us astray. Researches from Stanford and Princeton argue that we’re wired to fill information gaps and that seeking information can even be neurologically addicting, stimulating the release of dopamine. But, people tend to overestimate the value of information that’s missing and for which we have to expend effort to fill information gaps. This can lead to poor decision-making and much wasted effort. I guess I just like to think I’m immune from those pitfalls and can handle as much information as you throw at me.
Some argue that too many options can actually lead to “choice overload.” With so many options, and so much information, people feel the need to spend too much time and effort gathering information to make good choices, which can lead to uncertainty and in some cases avoiding decisions altogether.
So, where does all of this leave me? It’s hard to imagine that I’ll be able to rationally control my inclination to seek information when I have the chance. And certainly there are instances when using the insane amount of information at your fingertips has its advantages and apparently little downside. I think the secret is knowing how to weigh the benefits of information and knowing when I’ll be happy with a perfectly “good enough” option so I can devote my time and attention to more important things.
Fortunately, people are less likely to maximize as they get older and being married to a person like my wife, who is often far more likely to just make decisions and move on, is likely to temper my inclinations when we’re both involved in decision-making. Maybe there’s hope for me yet.