By Dana Yamashita
One would think that the more information provided when making purchasing decisions, the better the decisions would be. When shopping online there are product reviews, comparisons, specific product details, and even shipping information to consider. Some of that information is needed to make an appropriate choice, but much of it can simply be “background noise,” which can ultimately lead to bad choices.
Ian Chadd, assistant professor at Rensselaer Polytechnic Institute and behavioral economist, found that irrelevant information or unavailable options often cause people to make bad choices. Further, when both of these elements are present, the likelihood of a poor decision is increased.
Previously, it was thought that even when irrelevant information is included on a product, the consumer would skip over the data without spending a lot of time, or a lot of thought, on it.
Chadd’s research, published in Experimental Economics, revealed that the way information is presented does indeed matter. His research, which consisted of 222 individual tests, each consisting of more than 40 questions, indicates that decisions made in an environment of irrelevant information have time, cognitive, and cost consequences. His research also showed that consumers tend to have a “preference for simplicity,” and are willing to pay a price to reduce the amount of superfluous information.
“This is important insight for policymakers and choice architects alike,” Chadd said. “The goal should always be to opt toward simpler and more flexible presentation of information, so that consumers can decide for themselves what is and is not irrelevant and then not just ignore it if they see it, but also give them the option not to see it.”
Chadd’s co-authors on this paper, “The Relevance of Irrelevant Information,” are Emel Filiz-Ozbay and Erkut Y. Ozbay, both of the University of Maryland.