Can you have too much data?

October 5, 2012

In her newsletter, a friend and professional colleague from Australia, Babette Bensoussan, drew my attention to a recent article about decision-making, which in turn led to an academic study from the 1990, On the Pursuit and Misuse of Useless Information[1], which details a series of experiments in decision-making. 

The conclusion of that article, at least as it relates to competitive intelligence, is that

“Waiting for information that appears relevant to a decision can raise the extent to which it is brought before one’s attention and thus increase its influence on choice.”

What is this really mean?  It means that if you are trying to draw a conclusion based on the research that you’ve done, which is always necessarily incomplete, you will likely draw a particular conclusion.  However, if you are told that one piece of data that is missing now may be able to be obtained by further work or after waiting period of time, and you will postpone the analysis, and when you get that additional data, you will give it more weight in your decision-making than you would have if you had it earlier.

That certainly sounds counterintuitive, but reflects the fact that the researcher, you, has undergone a change in focus.  In other words, if you have to live with the fact that you do not know the professional experience, for example, of a new marketing manager hired by competitor when making an evaluation about the direction of a new marketing campaign, you just accept that.  But, if you had that information now, you would just finish your analysis and draw your conclusions, giving it some small weight.  However, if you postpone your analysis and focus on getting that specific bit of information, when you finally get it you will give it more weight (too much?) in your analysis.  Or, as the article’s authors put it, “waiting increases weighting”.

Keep this in mind if you decide that you’d like to put “just a little more work” into the project, when you already have sufficient intelligence on which to base a decision. 

[1] Anthony Bastardi, Stanford University, and Eldar Shafir, Princeton University, Journal of Personality and Social Psychology,  1998, Vol, 75, No. 1, 19-32.

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