In economics one of the most famous curve is the curve of diminishing return. This curve starts with an increasing positive return with every additional input. However, there is an inflection point, where the rate of positive return reduces and plateau at a point where there is no further increase in output with increase in input. After that point, and increase in input actually leads to a negative return, i.e., the output goes down with more input.
The knowledge curve follows a similar pattern – ‘Diminishing return with more and more knowledge’, till it hits a point where this return actually becomes a negative return. In biological terms, the prefrontal cortex (part of the brain that deals with information processing) can handle only so much information at any given time, so when there is an information overload we tend to make bad decisions.
The above phenomenon is well explained in the words of Herbert Simon – “A wealth of information creates a poverty of attention”. Some good examples to this effect of information loads are:
- Stock Picking – Paul Andreassen’s experiment (MIT) – Two groups were allowed to select a portfolio of stock. One group was given very limited information, while the other group had free access to information. The group with limited information ended up earning twice as much as the group with unlimited information.
- Student success in college – In another experiment with high school kids, an experiment was conducted to predict how successful a kid would be in college. On one hand there were high school counselors who had unlimited access to the kids past performance and on the other hand there was a simple rudimentary formula. The outcome – the formula could predict better than the counselors who has all the information.
- MRI and back pain – Until 1980’s, doctors did not have MRI’s reports to guide them with backache diagnosis. Mostly they prescribed the patient to go home and rest, which worked in most instances. However, since 1980’s, doctors have access to detailed information (which might have nothing to do with the patients actual cause of pain) that leads to wrong diagnosis and unnecessary surgery.
So what’s the point of all this?
This phenomenon of information overload will determine the future of the world. It’s going to change how humans behave, how politics is done, how business is conducted and how we go through a major CHANGE in our evolution process.
Taking about CHANGE, Internet today has provided people with easy access to information. With easy availability and lack of monitoring or quality control, the common man is like the doctor, the teacher or the stock picker in the above example. The simple decisions that were easy to make earlier are now more difficult and require more thinking.
Some would argue that ‘is it not better that we are better informed now and actually make rational decisions’. Like the knowledge curve, initially these decisions are better and we make more informed choices. However, as the information noise increases, how would humans behave? For example, lets think of buying cereal. Earlier, there were few brands, few choices and few information cues to be evaluated before making a decision. Now, going to a grocery store, we have way too many options, too many benefits to be evaluated and also too may opinions to be considered before making our decision. At the end of it, how do we make our final call might not be rational at all. It might just be the information cue that had the most emotional impact on us.
Now instead of deciding on what cereal we want to buy, think about which politician we want to run our country. If we end up choosing our leaders in a similar fashion as we choose cereal, we might be heading in the wrong direction. Therefore, how we deal with too much information might be critical in the coming days. Would this information overload lead to total chaos or can we come up with ways to counteract this going noise in all the communication channel?
Would easy access to information by the people handicap governments around the world? Would consumers rise up against companies exploiting them? Would the unemployed fight back for social justice? Would the poor band together for their fair share of the pie? Would we see the world moving towards a social revolution or a social chaos?
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