I recently read about a new study by Bradley R. Staats and his co-authors titled “Maintaining Beliefs in the Face of Negative News: The Moderating Role of Experience” in Management Science. They set out to study how decision-makers react when faced with negative news. The scholars chose to look at how expertise affects our likelihood to adjust our behavior in light of new negative information. They assembled an interesting database about cardiac stent use in Pennsylvania from 2003-08 involving nearly 400 cardiologists. During this time, the Federal Drug Administration (FDA) recommended that doctors reduce their use of drug-eluting stents, but it did not ban the use of these devices. The scholars set out to see how much the FDA's announcement affected behavior. In particular, they wanted to see how experts reacted, as opposed to doctors with less experience. Would overconfidence lead some experts to discount the new negative information? Here's what they found:
"For each standard deviation increase in experience, cardiologists were 6.3% more likely to use the drug-eluting stents before the FDA warning. Afterward, their use of the stents fell, but they were still more likely — 2.8% for each standard deviation increase in experience – than average to use the drug-eluting stents."
An article on the University of North Carolina's Kenan-Flagler Business School website summarizes the results and implications of this study:
It’s a kind of paradox. Are more experienced individuals – because of their presumably greater expertise – more likely to change their behavior when confronted by new information? Or are they more likely to resist new decisions because they’re confident about relying on their experience? That’s the fundamental question tackled by Brad Staats, professor of operations and faculty director of the Center for the Business of Health at UNC Kenan-Flagler. “Ideally, when you receive new information, you quickly adjust your decision-making – and you would expect the most experienced people would do so most accurately,” says Staats, “but our research indicates that might not be the case when they get negative news.”