At most time, we love to have more information and we always
feel information available to us is never enough. It is true that we do not
often have the access to perfect information and imperfect information often
affects our decision making and makes our decisions less perfect. However,
there could be I think some cases that we are actually better off without
perfect information.
Firstly, we have to admit that we are not able to execute
all information perfectly as we are constrained by time and tools available. Therefore,
when we are having too much information to analyse, it is likely to see that we
try to focus on certain categories of information but ignore other categories
of information; however, the categories that we focus on are not necessary to
be selected rationally. Sometimes we tend to focus on the information that is
surprising, for example, due to our loss aversion, we may focus on the negative
information rather than the positive information. Secondly, we are not always
necessarily right to make correct analysis on the information available to us.
Once we cannot get correct answers from our analysis, we are not better off
with more information, as we just do not get correct answers anyway. Thirdly,
information can affect our emotions. Usually when studying economics, we
exclude the case of people making decisions when they are not mentally stable.
However, though we usually exclude this case, it happens to our life. When we
are not mentally stable, we are not likely to make reasonable decisions under
such circumstance.
When we are receiving more information, information has to
be analysed by ourselves. The process of analysing information always involves
with risk, when we are doing more analysis, the probability of getting wrong is
increasing with the amount of information we are analysing. In addition, to
analyse more information, the tools and theoretical frameworks required have to
be more advanced.
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