In the past two decades the amount of information embedded in our daily lives has skyrocketed. There are smartphones that count our steps, websites that track our spending, digital maps to plot our commutes, software that watches our Web browsing, and apps to manage our schedules. We can precisely measure how many calories we eat each day, how much our cholesterol scores have improved each month, how many dollars we spent at restaurants, and how many minutes were allocated to the gym. This information can be incredibly powerful. If harnessed correctly, data can make our days more productive, our diets healthier, our schools more effective, and our lives less stressful.
Unfortunately, however, our ability to learn from information hasn’t necessarily kept pace with its proliferation. Though we can track our spending and cholesterol, we still often eat and spend in ways we know we should avoid. Even simple uses of information—such as choosing a restaurant or a new credit card—haven’t necessarily become more simple. To find a good Chinese restaurant, is it better to consult Google, ask your Facebook feed, call up a friend, or search your browser history to see where you ordered from last time? To figure out which credit card to sign up for, should you consult an online guide? Call your bank? Open those envelopes piling up on the dining room table?
In theory, the ongoing explosion in information should make the right answers more obvious. In practice, though, being surrounded by data often makes it harder to decide.
This inability to take advantage of data as it becomes more plentiful is called “information blindness.” Just as snow blindness refers to people losing the capacity to distinguish trees from hills under a blanket of powder, so information blindness refers to our mind’s tendency to stop absorbing data when there’s too much to take in.
One study of information blindness was published in 2004 when a group of researchers at Columbia University tried to figure out why some people sign up for 401(k) retirement plans while others don’t. They studied almost eight hundred thousand people, across hundreds of companies, who were offered opportunities to enroll in 401(k) plans. For many workers, signing up for the retirement plans should have been an easy choice: The 401(k)s offered large tax savings and many of the companies in the study promised to match employees’ contributions—in effect giving them free money. And at firms where workers were offered information on two 401(k) options, 75 percent enrolled. Employees at those companies told researchers that signing up seemed obvious. They looked at the two brochures, picked the plan that seemed most sensible, and then watched their retirement accounts grow fatter over time.
At other companies, even as the number of plans to choose among increased, sign-ups remained high. When workers were offered twenty-five different kinds of plans, 72 percent of them enrolled.
But when employees received information on more than thirty plans, something seemed to change. The amount of information people were receiving became so overwhelming that workers stopped making good choices—or, in some cases, any choice at all. At thirty-nine plans, only 65 percent of people signed up for 401(k) accounts. At sixty plans, participation dropped to 53 percent. “Every ten funds added was associated with 1.5 percent to 2 percent drop in participation,” the researchers wrote in their 2004 study. Signing up for a 401(k) was still the right decision. But when information became too plentiful, people put the brochures in a drawer and never looked at them again.
“We’ve found this in dozens of settings,” said Martin Eppler, a professor at the University of St. Gallen in Switzerland who studies information overload. “The quality of people’s decisions generally gets better as they receive more relevant information. But then their brain reaches a breaking point when the data becomes too much. They start ignoring options or making bad choices or stop interacting with the information completely.”
Information blindness occurs because of the way our brain’s capacity for learning has evolved. Humans are exceptionally good at absorbing information—as long as we can break data into a series of smaller and smaller pieces. This process is known as “winnowing” or “scaffolding.” Mental scaffolds are like file cabinets filled with folders that help us store and access information when the need arises. If someone is handed a huge wine list at a restaurant, for instance, they’ll typically have no problem making a selection because their brain will automatically place what they know about wine into a scaffold of categories they can use to make binary decisions (Do I want a white or a red? White!), and then finer subcategories (Expensive or cheap? Cheap!) until they confront a final comparison (The six-dollar Chardonnay or the seven-dollar Sauvignon Blanc?) that draws upon what they have already learned about themselves (I like Chardonnay!). We do this so quickly that, most of the time, we’re hardly aware it’s occurring.
“Our brains crave reducing things to two or three options,” said Eric Johnson, a cognitive psychologist at Columbia University who studies decision making. “So when we’re faced with a lot of information, we start automatically arranging it into mental folders and subfolders and sub-subfolders.”
This ability to digest large amounts of information by breaking it into smaller pieces is how our brains turn information into knowledge. We learn which facts or lessons to apply in a given situation by learning which folders to consult. Experts are distinguished from novices, in part, by how many folders they carry in their heads. An oenophile will look at a wine list and immediately rely on a vast system of folders—such as vintage and region—that don’t occur to novices. The oenophile has learned how to organize information (Choose the year first, then look at the pricing) in ways that make it less overwhelming. So while a novice is flipping through pages, the expert is already ignoring whole sections of the wine list.
So when we are presented with information on sixty different 401(k) plans and no obvious way to start analyzing them, our brains pivot to a more binary decision: Do I try to make sense of all this information, or just stick everything in my drawer and ignore it?