Making Decisions and Too Much InformationJanuary 29th, 2009 by Michael Kwan
On Tuesday night, I asked a question on Twitter:
“Who has a more difficult time choosing a cell phone? Total phone geeks (me) or total phone newbies?“
While this may sound like a question restricted to the realm of hot technology, it actually illustrates a very common problem that many of us have making decisions. Whether it be choosing between cell phones, picking the best template for a blog, or picking a holiday destination, many of us have a tendency to collect as much information as possible. I know that’s what I do, because I want to make an informed decision. Unfortunately, this increased knowledge can (ironically) result in greater indecision.
Overwhelmingly, the response I got from the Twitter community was that cell phone geeks have a more challenging time, because they are aware of the different features, their relative strengths, and other options that may lie outside of common knowledge. This is partly why ignorance can be bliss. If you walk into a restaurant and the menu only has two items, the decision is much easier. You can have pizza or pasta. If you walk into a different eatery and the menu reads like War and Peace, the decision is much more difficult. Less is more.
At the same time, I think you’d agree that collective ignorance isn’t a good thing either. You want to know about what options are available to you, because you don’t want to be stuck with a second-rate product at a premium price. Why buy the Motorola RAZR at $200 when you can get an iPhone for the same price?
There is definitely a certain appeal to simplicity. Sometimes, collecting all this extra information will just make you second guess yourself. At first glance, you may be absolutely certain that product A is for you. Looking a little deeper, you may discover some negative reviews of product A and some information about how product B is superior in some way. In the end, product A may indeed be a better fit for your needs, but you’ll keep wondering about the possibly greener pastures of product B. If you stayed narrow-minded, you would have already purchased product A and been done with it. You would have been happy. Instead, you can get stuck in a buyer’s dilemma with increased knowledge.
For the more academic in the audience, there is a good chance that you’ve had a similar experience with multiple-choice exams. Your initial response to a question is probably the right one. You studied. You’ve been immersed in the material for months. The power of recognition is huge and if you chose C, you should probably stick with C. This is the concept described in Blink: The Power of Thinking Without Thinking, one of the books on my reading list. Author Malcolm Gladwell also wrote Outliers: The Story of Success, another book that I plan on reading.
Is too much information a bad thing? Are you better off making snap judgments and sticking with them? Maybe. Maybe not. The ability to base your decisions on the least amount of information possible has to come from a foundation of experience. I wouldn’t expect an accountant to make a decision “in a blink of an eye” regarding a car that has broken down on the side of the road. I would expect, however, for that accountant to be more decisive when it comes to helping me determine the best corporate structure for a new business.
What are your thoughts on the matter? Do you agree with Malcolm Gladwell in that quick decisions are oftentimes better? Or do you think that information gathering is the superior approach?