What is it? Information bias is the tendency to seek more information about a problem even when it's not helpful in making a decision or taking action. If all data can be split into two camps, there is useful information (signal), and useless noise. Because we don't know which is which unless we first have an opportunity to interpret the new information, we assume that the cost of continuously gathering new information is less than the value of the possibility that something useful might be found from it.
Why is it helpful? It's pretty standard common sense to believe that more information is better than less information. If you're on the fence about something, it often helps to seek more information before making a final decision. However, this stance could potentially underestimate the cost of diluting good information.
How can it be harmful? There are three main ways that this bias can become harmful.
- It leads to paralysis. Waiting for new information slows you down. Without knowing much about what new data means
it's very easy to get swamped by it all and have no idea what to do
with it. Clear decisions can decay into listless waffling, and sometimes into decision paralysis.
- It's wrong. We're all familiar with the phenomenon of witnessing people use information to justify decisions, and know that in many cases statistics and studies can use the same pool of data to prove two or more completely opposite positions. Weak or misinterpreted information is worse than no information at all.
- It gives you false confidence. The more information you
have backing you up, the more confident you become about your decision
and the less flexible you become about alternative options. This is
great when you have good information, but very harmful when you have
noisy or wrong information.
What can you do? Malcolm Gladwell has some interesting studies in his book Blink that have to do with this bias. He calls the opposite behavior "thin-slicing"... taking a small slice of all possible information which you know to be trustworthy, and discarding the rest. This too has its advantages and disadvantages, as it too is a bias in its own way.
As we'll find with many of these cognitive biases, there's not much you can do other than be aware of what you're doing. Make sure you balance between equal and opposite biases in such a way that you don't lean on any one of them more than you absolutely have to.
Do you have ideas which worth millions but you lack the necessary capital to put your idea to test?
Posted by: RamonGustav | Aug 23, 2010 at 09:58 PM