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Can You Have Too Much Information?

15 April, 2013 by James Lawther 3 Comments

We live in a world of big data.  We are all collecting information, compiling it and then trying to work out how to use it to our best advantage.

So of course we want to see all the information available and then some, before a decision is made.  The more information we have the happier and more confident we feel in our actions.  After all, you can never have too much information.

Can you have too much information?

In the 1960’s Stuart Oskamp carried out an experiment on a group of psychologists:

He gave them all a case study about Joseph Kidd, a 29-year-old man who was experiencing “adolescent maladjustment”.  The case study came in four parts:

  1. Joseph Kidd was introduced as a war veteran who worked in a florists
  2. Joseph’s childhood up to the age of 12 was discussed
  3. Joseph’s further education was shared
  4. Finally Joseph’s experience in Vietnam was detailed

After each part of the case study the psychologists provided two pieces of information:

  • The answers to a multiple-choice questionnaire about Joseph’s condition
  • An estimate of how accurate they thought those answers were

More information gives greater confidence

As you would expect, as the psychologists were given progressively more and more information their certainty in their diagnoses increased.  They became more and more confident.

But it doesn’t improve accuracy

But it didn’t improve the accuracy of their diagnoses one bit.

As the information became richer the psychologists went back over their existing answers, progressively refining and changing them, but their accuracy remained static.

Joseph Kidd Results

So you can have too much information

Having more and more data to play with has three downsides:

  1. It takes time and effort to acquire and process information
  2. It becomes more and more difficult to see the wood from the trees
  3. (And most worrying) Lots of data leads to overconfidence.

To twist an old adage “overconfidence comes before a fall.”

So how do you cope in a data rich world?

As with most things the Pareto principle comes into play.  Some of the information we have is vitally important, but most of it is negligible.

So the trick is to be clear about what the data is that you need before you start, not continually play with and add to the information you have.

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Too Much Information

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Image by Alaskan Woman

Filed Under: Blog, Operations Analysis Tagged With: big data, confidence, data is not information, decisions

About the Author

James Lawther
James Lawther

James Lawther is a middle-aged, middle manager.

To reach this highly elevated position he has worked in numerous industries, from supermarket retailing to tax collecting.  He has had several operational roles, including running the night shift in a frozen pea packing factory and carrying out operational research for a credit card company.

As you can see from his C.V. he has either a wealth of experience or is incapable of holding down a job.  If the latter is true this post isn’t worth a minute of your attention.

Unfortunately, the only way to find out is to read it and decide for yourself.

www.squawkpoint.com/

Comments

  1. maz iqbal says

    18 April, 2013 at 9:54 pm

    Hello James

    Thank you for sharing these insights.

    May I add one more? It occurs to me that data almost always is measurement of the past. And you can only predict the future on the basis of the past if you assume that the world will not change in any real sense. Which is to say that we are assuming a static universe. This assumption works for many realms. And there is one realm in which it is troublesome: the human realm.

    As far as I know the fall of the Berlin Wall came as a shock. 9/11 came as a shock. The fact that the 9/11 bombers were from Saudi Arabia, educated and middle class came as a shock. The financial crisis that brought capitalism to its knees came as a shock. People embracing the very expensive iPhone came as a shock… Waitrose doing well in a recession and Tesco struggling is a surprise to many.

    All the best
    Maz

    Reply
  2. Adrian Swinscoe says

    21 April, 2013 at 10:18 am

    Hi James,
    I like your Pareto idea to our data needs. However, I guess that the trick will be, especially in a world of big and getting bigger data, is knowing when we have gotten to 80%. Right?

    Or, maybe we need to stop using the ‘we need more data’ argument and just make more and smaller decisions as a way to progress, learn and gather our own data.

    Adrian

    Reply
    • James Lawther says

      25 April, 2013 at 9:03 pm

      Adrian, I can’t help but think any decision (big or small) would be a good thing, and that data (or lack of it) is often used as an excuse for lack of action

      James

      Reply

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