It can take a lot of information to make a good decision. If you’re hiring someone, you’re probably conducting multiple rounds of interviews and checking references. If you’re launching a new product, you can start with some A/B testing.
It can take a lot of information to make a good decision. If you’re hiring someone, you’re probably conducting multiple rounds of interviews and checking references. If you’re launching a new product, you can start with some A/B testing.
But gathering all this information comes at a cost in time, money, or both. So how do you decide when you have enough information to make an informed decision?
New research from the Kellogg School shows that how a decision is framed—whether as a goal you want to achieve or a responsibility you don’t want to mess up—affects how much information people gather before making that decision.
Across three studies, researchers found that we gather more information when decisions are framed in terms of potential losses than potential gains, even when acquiring that information is costly. This is true even when we collect information that we know may conflict with our beliefs—a finding that could affect how politicians frame their messages to voters.
“When you make people risk averse, they’re willing to pay to get more information to make a decision they can be confident about,” he says. Galen Bodenhausenprofessor of marketing at Kellogg and a co-author on the study.
A prevention versus promotion mindset
The research is rooted in a psychological concept called regulatory focus theory.
The idea is that people have one of two different types of motivation to achieve a goal. In general, those who focus on promotion are willing to achieve a goal because it offers an opportunity for self-promotion. profit—while those who focus on prevention are alert to the need to fulfill their obligations, and thus engage more in what they can I lose if they make a bad decision. Previous research has shown that people with a promotion focus are more likely to take risks in their decisions, while prevention-oriented individuals are more purposeful.
A few previous studies have examined how regulatory focus affects information gathering, but none have presented participants with an economic cost of information gathering. Bodenhausen, along with Northwestern postdoc Michalis Mamakos, wanted to see how a monetary cost would affect decision-making in the context of regulatory focus.
Costly information and regulatory focus
About 400 online participants were recruited for each of the first two studies and divided into a promotion- or prevention-focused group. They were then presented with a scenario in which a company had to choose between two green light products. The participant’s job was to guess which product the company chose.
Before doing so, participants were given the opportunity to request information to help make their decision. The information may provide information on pricing or product competitiveness, for example. The two studies were identical except that the cost of information was 10 cents in the first study and only 5 cents in the second.
The language the researchers used to describe the participant’s work differed for the promotion- and prevention-focused groups. The promotion team was told that this was a “goal” and that they could earn up to a 70-minute “bonus” for choosing the correct option, minus what they spent on information. The prevention team was told that this was an “assignment” and that they would receive a 70-cent “budget” and lose money for every piece of information they requested — but lose the entire budget if they made the wrong final decision.
Participants could then click on up to five different pieces of information before deciding they were ready to make their decision.
In both studies, participants in the prevention group were likely to consider more information before making a decision—an average of 2 in the prevention group and 1.66 in the promotion group in the first study and 2.75 versus 2.4 in the second (where searching for information was a little cheaper).
This is in line with what the researchers expected. A focus on prevention “makes people more careful and cautious,” says Mamakos. “They want to play it safer.”
Regulatory focus and political candidates
In the first two studies, participants had no stake in which product the company chose to pursue. they just wanted to pick the right answer. In the final experiment, however, the researchers wanted to see what would happen if participants actually had a stake in the choice while still wanting to choose the correct answer.
They did this by introducing another psychological theory, motivated reasoning, into the study. “That’s when there’s a preference for the outcome and you’re not just driven by making a good decision. You want something very specific to apply,” says Mamakos.
The study was similar in design to the first two, but focused on political candidates rather than products. The researchers recruited about 1,200 online participants who had declared their party political identities. (About two-thirds were Democrats and one-third were Republicans, but the researchers found no difference in results based on party affiliation.)
Participants were again divided into prevention- and promotion-focused groups, with the decision framed as either a goal or a task. They were then presented with a scenario in which polls had been conducted on two candidates running in an anonymous gubernatorial election in 2022. Participants were asked to predict which candidate won and could request up to five pieces of information from the polls to make their decision. The information may include insight into which candidate was the better communicator or more intelligent. Each piece of information cost 5 cents.
But for this study, some participants were never told the candidates’ party affiliations, while others were given that information. Thus, participants who knew the candidates’ political beliefs faced the fact that any information they gathered might confirm or contradict the candidate’s superiority over their own political party.
The results showed that when candidates’ parties were named, people were willing to stop searching for information earlier if what they had already seen aligned with their personal views compared to those whose initial information contradicted their policies hopes.
But, interestingly, the impact of participating in the prevention- or promotion-focused group held despite the added incentive to seek information that participants agreed with. As in the first two studies, prevention-focused participants still sought more information, on average, than promotion-focused participants, regardless of whether the first information aligned with their beliefs.
It persuades voters to seek more information
The results suggest that people can be driven to seek more information when making a political decision, even if they risk finding information they disagree with.
“If we want to increase people’s desire to achieve accuracy against a preferred outcome, the regulatory focus framework can help,” says Mamakos. Candidates could, for example, emphasize what voters have to lose by not seeking out more information about an opponent, if that is a goal.
This is important because, while most of us have a dominant regulatory focus, any trend can generally be triggered depending on how a decision is framed, Bodenhausen explains. And the power of this framework can override other decision-making impulses.
“It’s possible to frame tasks in different ways that trigger different priorities,” he says. “Context has its own impact that holds despite these other countervailing concerns about how much the information costs or the preferred outcome.”
