How Much Data is Enough Before a Decision?

This article from Harvard Business review by Ed O’Brien shows we use less data than we think to make decisions. Somewhat surprising in this age of easy access to information. People think they assess all available information before making a decision, but experiments show that isn’t the case. We make our minds up quickly, before we have a chance to work through all the data.

In a series of experiments, published  here, O’Brien and his co-author Nadav Klein tested the hypothesis that people overestimate how much information they will assess before making up their minds.

This was confirmed in several experiments. Two examples:

  • How many paintings do you need to see before determining if you like the style? Prediction 16 or 17 paintings, reality: 3 or 4 paintings.
  • How many essays will a hiring manager read? Participants wrote on average 4 essays, hiring managers read on average 2.

How do you make sure you look at ‘enough’ information and not decide too quickly? The article gives a range of advice. One tip is for experiences that don’t change much over time deciding quickly is appropriate, but don’t judge an employee’s performance too soon. And keep the perspective of others in mind. Will they really focus on your full multipage resume or should you put more effort into optimizing less content?

Very interesting read. Do you consider enough information before making decisions?