Fantasy and Dread: The Demand for Information and the Consumption Utility of the Future

Abstract

We present evidence that intrinsic demand for information about the future is increasing in expected future consumption utility. In the first experiment, subjects may resolve a lottery now or later. The information is useless for decision making, but the larger the reward, the more likely subjects are to pay to resolve the lottery early. In the second experiment, subjects may pay to avoid being tested for herpes simplex virus type 1 (HSV-1) and the more highly feared type 2 (HSV-2). Subjects are three times more likely to avoid testing for HSV-2, suggesting that more aversive outcomes lead to more information avoidance. In a third experiment, subjects make choices about when to get tested for a fictional disease. Some subjects behave in a way consistent with expected utility theory, and others exhibit greater delay of information for more severe diseases. We also find that information choice is correlated with positive affect, ambiguity aversion, and time preference, as some theories predict. Data, as supplemental material, are available at https://doi.org/10.1287/mnsc.2016.2550 . This paper was accepted by Teck-Hua Ho, behavioral economics.

Information Avoidance

“…Investors avoid looking at their financial portfolios when the stock market is down, an "ostrich effect" (Karlsson, Loewenstein, and Seppi 2009;Sicherman et al 2016). Individuals at risk for health conditions often eschew medical tests (e.g., for serious genetic conditions or STDs) even when the information is costless and should, logically, help them make better decisions (Ganguly and Tasoff forthcoming;Lerman et al 1996Lerman et al , 1999Lyter et al 1987;Oster, Shoulson, and Dorsey 2013;Sullivan, Lansky, and Drake 2004;Thornton 2008). Managers often avoid hearing arguments that conflict with their preliminary decisions (Deshpande and Kohli 1989;Schulz-Hardt et al 2000;Zaltman 1983), even when such arguments could help them avoid implementing measures that are ill-founded.…”

Hospital Librarians: From Consumer Health to Patient Education and Beyond

“…It will be important to review the multidimensional issues behind information seeking and readiness to learn to continue to best serve all patrons: staff, patients, and families. The idea of humans avoiding knowledge such as looking up the answer, for example, has been called the ostrich effect (19,20).…”

“…Observation suggests that people avoid information about painful future experiences such as the deterioration of one's health, expected social conflict, and financial woes (19).…”

“…Selective attention or aversion to this information may be related to human evolution and how humans originally survived living with risk (19). As a librarian, considering the reasons that people may have for avoiding the library is a concept that really hit home.…”

“…We expect that such information avoidance is likely to manifest in other domains, especially those that are high stakes such as cancer screenings, and financial information regarding one's crippling debts (19).…”