Armed With Information, People Make Poor Choices, Study Finds

March 31, 2010

AUSTIN, Texas — When faced with a choice that could yield either short-term satisfaction or longer-term benefits, people with complete information about the options generally go for the quick reward, according to new research from University of Texas at Austin psychologists.

The findings, available online in the journal Judgment and Decision Making, could help better explain the decisions people make on everything from eating right and exercising to spending more on environmentally friendly products.

"You'd think that with more information about your options, a person would make a better decision. Our study suggests the opposite," says Associate Professor Bradley Love, who conducted the research with graduate student Ross Otto. "To fully appreciate a long-term option, you have to choose it repeatedly and begin to feel the benefits."

As part of the study, 78 subjects were repeatedly given two options through a computer program that allowed them to accumulate points. For each choice, one option offered the subject more points. But choosing the other option could lead to more points further along in the experiment.

A small cash bonus was tied to the subjects' performance, providing an incentive to rack up more points during the 250 trial questions.

However, subjects who were given full and accurate information about what they would have to give up in the short term to rack up points in the long term, chose the quick payoff more than twice as often as those who were given false information or no information about the rewards they would be giving up.

In a real-life scenario, a student who stayed home to study and then learned he had missed a fun party would be less likely to study the next time in a similar situation — even if that option provides more long-term benefits.

"Basically, people have to stay away from thinking about the short-term pains and gains or they are sunk and, objectively, will end up worse off," says Love.

While psychologists have long studied how humans make choices, this is among the first research that examines how people measure "what could have been" when they make repeated decisions that affect their future state.

Love says he believes the long-term benefits of specific decisions can be reinforced by tangible rewards, such as a good grade, a raise or promotion, which can serve as markers of long-term success and help overcome short-term biases

"If there were no conflict in our choices, this wouldn't be a problem. But everything has that conflict between short-term and long-term goals," says Love. "It's really hard for a learning system to disentangle what's good for you in the short term or long-term."

For more information, contact: Gary Susswein, Office of the President, 512-471-4945; Bradley Love, 512-232-5732.

15 Comments to "Armed With Information, People Make Poor Choices, Study Finds"

1.  Jeffrey Walker said on April 1, 2010

This research, if its conclusions hold up, suggests there is a problem in our modern culture of information -- i.e., the assumption that the more info one has, the better choices one will make, without taking into account the quality, or principles, of reasoning by which that info is processed. A person who does not know how to think will simply be overwhelmed by additional information, will have trouble deciding which bits of information are more reliable or more important, and so on. In short, I think that poor decision-making is not only a matter of being unable to defer satisfactions, but also of not knowing how to reason well -- which is a teachable skill. Our educational systems currently place great emphasis on information, and little emphasis on reasoning skills, from calculation (mathematical reasoning) and logic to the subtle arts of practical reasoning and deliberation.

2.  Norvell Wisdom said on April 1, 2010

Still another reason not to wonder why most people's political decisions take such little account of the long term!

3.  James Thornton said on April 1, 2010

Someone paid money to figure this out? No wonder the cost of education has become so outrageous! They have the local village idiot deciding on which studies to be funded.

4.  Linda Benskin said on April 1, 2010

Was the study done with university undergraduates as subjects? If so, it is likely that it is not generalizable to the population at large, since these university students are rarely over the age of 25, which is when the higher-order decision-making part of the brain is finally fully developed.

5.  Trevor Self said on April 1, 2010

I hope this research offers more than this article suggests. There are decades of research on how people's estimations of opportunity costs affect current decisions. I hope the authors at least bothered to read (and reference) research in economics on perceived opportunity costs or in other areas of psychology on expectancy theory (including VIE and other theories) before making a claim that this research (using undergrads who answer computer questions to earn points) has just moved us appreciably forward in our understanding of human decision-making.

6.  PJ Smith said on April 1, 2010

It would be interesting to learn how the test study individual's views of mortality figured into their choices. If they held no belief of an afterlife and were of the eat-drink-be-merry-for-tomorrow-we-die mindset then short-term gain makes sense. If they're of a rewards-in-heaven mindset then perhaps they'd trend more towards long-term gain. And of course there's a very wide spectrum here. You'd also want to figure in their age, health, wealth, history of getting and having, etc.

The implication in the report is that choosing the short-term gain is less correct, but unless we know the entire equation being used for decision-making it's hard to judge.

7.  Blake said on April 1, 2010

Does anyone else see the irony in this study?

8.  Pat Hervey said on April 2, 2010

I don't think this one experiment can be so broadly applied as to claim people usually opt for the short term gains. They were playing a game. It involved numbers (accumulating points). People are not always good at seeing the results of numerical operations.

9.  Ed Harrison, Santa Clarita, Calif. said on April 2, 2010

I've seen studies that reinforce these findings.

I wonder if there has been additional research like this within classifications such as, differences between generations, differences between ethnicity, etc.

I suspect there are! Are there differences and what accounts for the differences and what can be done to improve personal bias toward short term sacrifice in favor of longer term goals?

Informed policy based on research like this could have a profound impact on society.

10.  Yvette Murray PhD said on April 2, 2010

The synopsis of the study inappropriately generalizes the research results without indicating the potential influence of factors such as the respondents' age, gender and socioeconomic status.

11.  E.J. Menchaca said on April 2, 2010

Teachers and parents have been aware of this "conflict in making choices" with students and their own children. I am a retired teacher and parent and found your article interesting. I wonder what your data would indicate if you looked at the age of the subjects. I suspect younger subjects have a stronger need to "quick pay-off" than older subjects.

12.  Michael Quariadi said on April 3, 2010

I made a poor choice. I got a degree from The University of Texas at Austin. A degree that isn't getting me any jobs now. Every employer always wants five to 10 years of experience, and nobody cares about my degree in mechanical engineering.

13.  Greg Pasztor said on April 4, 2010

Only the teaching of ethics and critical thinking skills at secondary and college level will alleviate our 'human' focus on the short term.

14.  Kate Smith said on April 6, 2010

Are the authors of this study aware that young adults have recently been scientifically demonstrated to be particularly poor decision makers? Drawing conclusions to apply to the population at large from a group aged 18-23 is scientifically flawed. Tell me you didn't do that.

15.  Andy Lehrer said on July 8, 2010

Houston, we have know problem.