Friday, May 24, 2024

Why We Might Keep Hunting for More Data Despite The Costs

Michalis Mamakos and Galen Bodenhausen have published an interesting new paper in the journal Cognition titled “Motivational Drivers of Costly Information Search.” These two scholars examined whether our search for additional information may hinge on how we frame a problem. They hypothesize that our tendency to gather more data and conduct additional analysis may depend on whether we frame the issue in terms of gains vs. losses. Kellogg Insight's Emily Stone summarizes the key concept:

The idea is that people have one of two different types of motivations for reaching a goal. Broadly speaking, those with a promotion focus are eager to achieve a goal because it offers a chance for self-advancement—a gain—while those with a prevention focus are vigilant about the need to fulfill their obligations, and thus they’re more occupied with what they might lose if they make a bad decision. Prior research has shown that people with a promotion focus are more likely to take risks in their decisions, while prevention-oriented people are more deliberate.

While prior studies have compared this promotion vs. prevention focus, this study went further by examining whether people in a prevention mindset will seek to gather more information even when aware of the costs of acquiring more data. Moreover, they examined whether those in a prevention mindset might be willing to gather more information even if it disconfirmed existing beliefs. Indeed, the scholars found that, "prevention-framed messages can motivate the search for decision-relevant information, even when this search is costly and could lead to disagreeable data."

Of course, this search for an additional information can be a double-edged sword. On the other hand, the additional comprehensiveness may lead to higher decision quality. On the other hand, perhaps being worried about downside risks and potential losses may lead people to engage in highly costly search and time-consuming analysis that ultimately leads to untimely decisions. Companies may see opportunities pass them by, or competitors gain the upper hand, because leaders engage in costly and time-consuming search for that elusive "perfect" information to make a tough decision.

Weighing the costs and benefits of additional information search is critical. In particular, we must consider that the marginal benefits of additional data may decline over time, while the marginal costs of searching for more data may escalate over time.

No comments: