Some misc. things today…..
1- I read a short story about decision making yesterday:
A psychologist gathered up 8 professional horse handicappers and told them he wanted to see how well they could predict the winners of horse races.
Their test was to predict 40 horse races in four rounds.
In round 1:
Each gambler would get the 5 pieces of information he wanted most about the upcoming race. (Could vary for each gambler- whatever they most wanted to know. Could be knowing about certain accomplishments of the horse, or years of experience of the jockey, whatever.)
The handicapper had to predict not only the winner, but also had to state how confident he was in his prediction.
Based on 10 horses in each race, we might expect that by blind chance, each handicapper would be right about 10 percent of the time, or their confidence with a blind guess would be 10 percent, with no information.
The results from Round 1, with their 5 pieces of info, was 17 percent accuracy- not bad, really, since that’s 70% better than the 10 percent chance they started with (blind luck). Their confidence score was 19%.
In Round 2:
They received 10 pieces of information.
In Round 3:
They got 20 pieces of information.
And in Round 4:
They got 40 pieces of information about the horses/ jockeys/ race conditions/ etc. (i.e. A LOT more than the 5 pieces they started with.)
Their accuracy actually flatlined at 17 percent. They were no more accurate with the 35 additional pieces of information than they were with just 5 pieces.
The most interesting part?!
With all the extra information, they ranked their confidence in their bets at double their original confidence- 34%!
Meaning…. the additional information made them no more accurate, but a whole lot more confident.
Beyond a certain minimal amount, additional information really only feeds “confirmation bias”. (Not to even mention though the cost of acquiring that extra information.) After those first pieces of information, we mostly have our mind made up, subconsciously. Any new contradictory information that comes in we conveniently ignore or dismiss, while any information that confirms our original decision makes us more certain that our conclusion was correct.
I found this whole experiment to be so interesting!! I tend to be someone who is not naturally very decisive, but this makes a good case for not needing to over-think and over-analyze everything. Yes, gathering some information is good and very important. But if the outcome is the same with 5 key pieces of information versus 40, well, it’s a lot simpler to stop at the 5.
*This story was originally directed at investors and the counter-intuitive world of investing. Apparently accumulating too much information could actually hurt your investment results! (Too much info = overconfidence= losing money)
2- My aunt shared a link yesterday to this “autumn” page on Facebook.
I started following it, and it’s so cute!! They post all sorts of adorable and festive autumn themed things, much of it sort of old-fashioned or nostalgia- inducing. It’s called “Cozinest Hollow Vintage”, if anyone is on FB and wants to indulge in some fall stuff.
3- I saw this, too, and I felt it in my soul. 🤣
4- A quote I loved:
“Life will present you with unexpected opportunities, and you won’t always know in advance which are the important moments. Above all, it’s the quality of your relationships that will determine the quality of your life. Invest in your connections, even those that seem inconsequential.”
5- One more:
“Each day contains 86,000 seconds, so we have countless opportunities to reset, recover our balance, and continue rehearsing our best selves.”
Happy Friday/ Happy First Fall Weekend!!!!
I am grateful for the morning local news anchors who get up so early every day. I really enjoy hearing local updates, weather reports, and just general happenings on the TV while we putter about in the kitchen getting ready for school.
18 thoughts on “Information and overconfidence in decision making… plus other misc.”
Happy Fall Weekend indeed!
Hurricane Fiona is set to make landfall in NS later today, so we’re hunkering down for this first weekend of fall weather.
You know I am an Over-Thinker, so I can relate to this story on so many levels. I think I am slloooowwwwlllyy getting a bit better at this, but it’s a regular struggle for me. Especially if I’m innundated with a lot of decisions all at once. I get a deer-in-headlights attitude and start struggling to make even the most simple decisions.
That said, now that are renovations are almost over (after 1.5 years or, more accurately, FIVE years), I am ready to ease off on decisions for a while.
And the calendar/list meme made me laugh out loud. This is me to a “T!”
I actually thought of you when I first read this story about decision making! haha. I know you struggle with this area, too. SAME HERE. I’m happy to hear your renovation decisions are mostly behind you now. Maybe the next time you need to make a bunch of decisions, you’ll be a little better at it after all this practice. 😉
I have friends who are looking for a house to buy right now and they have looked at so many homes. So many. I feel like they have so much data in their brains that they’ll never be able to make a decision. When we were looking for a house, there were only four or five in our price range in the entire market, so we literally made an offer (and bought!) the second house we looked at. Anyway, information overload is real and confirmation bias is also real.
I know the weather has taken a turn, but I’m still holding on to summer with both hands. Don’t make me think about falling leaves and Halloween, yet. I did have to wear my fall/spring down jacket on the walks with the dog yesterday and today and I’m already grumpy about how much more work it is to go on walks than when I could just grab the leash and go.
Oh my gosh, the house buying world is the worst. Before we decided to remodel our kitchen a few years ago, we seriously contemplated just moving instead. I think we looked at 30+ houses over the span of a couple years. In our case, we didn’t “have” to move, and we generally liked our house, so I am sure that made my indecisiveness worse. I felt like if I was going to move from a house that I generally liked a lot of things about, the new house would have to be basically PERFECT. Except all of the “perfect” houses I found were about $200k over our price range. LOL. I think our realtor probably hates us now, because after all of that, we finally bit the bullet and just remodeled our kitchen and have stayed put in our original house! I sometimes feel wistful and wonder if we “should have” moved, but overall, I’m happy with our older, very cozy home. Can’t beat our mortgage and insanely low interest rate from 2013, either, compared to most of the newer/bigger homes around. I think if we were moving for a job or had a more urgent need to move, I would maybe feel different about it all. But like I said, for us, it was an optional thing- our house is older, and therefore will need updates/renovations, so we were trying to decide if we should just get a newer house that had some of those things done already. But in real estate, there are always so many trade offs! It’s like a decision making nightmare for someone like me. 😉
That experiment is very interesting! My husband is a person who wants to get all information possible prior to making a decision, which is wise, but also, omg, just make a decision. I like to have lots of information too but at some point you need to take a leap of faith.
Actually that experiment reminded me of the Monty Hall problem in that it is very counter-intuitive.
It’s definitely fall here! Time for boots and sweaters and scarves.
I think my husband is generally more the opposite- he will get some info, but is MUCH better about just feeling confident in what he likes or wants and then going with that. Whereas if I’m picking, say, paint or something for our house, I will hem and haw and second guess and think about it from a million different angles…. In my opinion, I think he can be too hasty sometimes and doesn’t always fully consider the big picture! So I guess both sides have their issues.
Ooooh I really like that bit about more information not necessarily leading to better outcomes. I tend to get really overwhelmed the more information I have, and I guess I end up putting outsized trust in a few (hopefully reliable!) sources, which always makes me a little nervous. This makes me feel much better about that strategy!
AGREE that for certain things, I am more than happy to just ask someone who has previous experience and hopefully follow their lead. I think this is a great tip for like, hiring professionals to do something at your house.
LikeLiked by 1 person
My husband is a questioner and a slow decision maker. I am more of a satisfier than a maximizer but I can be prone to indecision at times, too. Like when we were looking at resorts in Mexico. There are soooo many options! I was getting overwhelmed so asked for suggestions from friends as that is a much easier way to limit my options versus reading reviews, etc!
The quote about friendship is a great one and makes me feel good about my decision to focus on ‘connections’ for 2022. It’s been so great I think it will be my focus again in 2023!
I can get overwhelmed when picking travel lodging, too. Especially for something like a Caribbean resort or Mexico, where there are just a LOT of options…. If you have a certain location requirement, that can help to narrow it down a lot, but in many of those tropical locations, almost any location is good! Where are you going again? Cancun, right?
Yes! We are flying into Cancun and will be staying in the Riviera Maya area. I can’t wait!!
I feel like I always want more information. But it makes making a choice harder for me because the more information I have, the more information I think is still out there that I need.
The piece about confidence is also interesting. I wonder, if having less information makes someone happier (or more content) with the results despite (or even because) they were less confident in their choice? Because if you aren’t so confident in your guess, being wrong is not such a big deal, and being right feels lucky. Whereas if you are more confident, you are more invested in being right or wrong.
Yes, I struggle with this so much too! The confidence piece. I said in a previous response above, I think my husband is much better about feeling sure or confident about what he likes or doesn’t like. I am much more of like….well…I like the grey…but I don’t know, the tan is nice too….but that blue color is more unique…. I guess I like them all, but in different ways….. haha! He would just be like, the blue. Done. lol!
I see what you mean about the confidence in the guesses thing, too. I could see how being more unsure of something and getting a good outcome could be like nice surprise. I hadn’t thought about it that way before!
i love this post so much. first, I am the type of person that need confirmation with more information to gather confidence about my decision, especially those that are unconventional (i read 7 books about babies sleep!). Also, I like the quote #4, the older I get, the more I value relationships above all, not for the purpose for later but the human craving of deep connection. Yet, i think we have limited time, thus choosing where to invest is critical.
I like to have more information, but I also can get really tired of thinking about things, after a while. So I can be prone to eventually sort of throw up my hands and be like, “ok, I’m done with this! Now I’m just going to pick whatever.” Which probably isn’t the greatest way to handle it, either. So I try to be aware that I will “burn out” on all of the deliberating, and it might eventually backfire on me taking the easy way out…..and then maybe ultimately being unhappy with the choice. But sometimes it does work out, too.
I’m so honored to be one of your best blog friends, the feeling is mutual. 🙂
I definitely have a tendency to overthink, but I’ve been getting much better about going with my first gut instinct on many things. A lot less stressful in most situations.
Haha, I chuckled about the calender/list meme… sounds familiar 🙂
OK, that meme is on point. And I’m a total overthinker, too. Why pick the best-rated option on Amazon when I can spend (waste?) 10 minutes exploring alternatives? Why make a decision when I could enjoy 3 days of dithering? Sigh.