Information & Decision-Making
Jay Russo and Paul Schoemaker (Winning Decisions) note that we often believe more information provides a clearer picture of the future and improves our decision-making. But in reality, additional information often only confuses the decision-making process.
Researchers asked handicappers to make horse race predictions with five pieces of information. The researchers then asked the handicappers to make the same predictions with ten, twenty, and forty pieces of information for each horse in the race. Even though the handicappers gained little accuracy by using the additional information, their confidence in their predictive ability rose with the supplementary data.