No need to tell that we are living in the age of information. The level of our information consumption, now, can go nowhere as we are at its peak! Having distracted by IM and E-mail every single minutes we have already made quite significant hole in the wall of our unwavering attention. Besides, as information is the most easily available commodity we look for it every time we need to make a decision. And Google is there with its unfaltering algorithm to meet our every information needs! Our decisions, now, are no more wild guesses. We don’t guess, even when we need to.
We search for information when we need to decide over what movie to watch, what fish to buy, what car to choose, what song to listen and so on. It is interesting that we have access to information to make better decisions, in our personal life, social life and in our professional life. However, is the information, for making decisions, always good? Answer better be drawn from back.
The Nobel Prize winning economist Herbert Simon put it so presciently, back in 1970, even before there was an Internet: “What information consumes is rather obvious. It consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention” – said Herbert Simon.
As we look at more information, more analysis, more arithmetic we loss focus on reality, we loss contact with changes happening around us and that is one of the worst things could be happened when you are making a decision. Let’s look into this study for a deeper understanding.
In the late 1980s, the psychologist Paul Andreassen conducted a simple experiment on some MIT business students. First, Andreassen let each of the students select a portfolio of stock investment. Then he divided the the students into two groups. The first group could see only the changes in the prices in their stocks. They had no idea why the share prices rose or fell and had to make their trading decisions based on extremely limited amount of the data. In contrast, the second group was given access to steady stream of financial information. They could watch CNBC, read the Wall Street Journal and consult experts for the latest analysis of market trends. So which group did better? To Andearssen’s surprise, the student with less information ended up earning more than twice as much as the well informed group. Being exposed to extra news was distracting and disconnecting with reality. And high information students quickly became focused on the latest rumors and insider groups instead of focusing on real time changes. As a result of all extra input, these students were in far more buying and selling than the low information group. They were convinced that all their knowledge allowed them to anticipate the market. But they were wrong.
Having more information, getting access to more researches, to make decisions, does not make us smart decision makers. Rather a balance amount of information along with a constant contact with reality can help us to make better decisions.