The illusion of knowledge: When more information reduces accuracy and increases confidence

Crystal C. Hall, Lynn Ariss, Alexander T. Todorov

Research output: Contribution to journalArticle

85 Scopus citations

Abstract

Intuition suggests that having more information can increase prediction accuracy of uncertain outcomes. In four experiments, we show that more knowledge can decrease accuracy and simultaneously increase prediction confidence. Participants were asked to predict basketball games sampled from a National Basketball Association season. All participants were provided with statistics (win record, halftime score), while half were additionally given the team names. Knowledge of names increased the confidence of basketball fans consistent with their belief that this knowledge improved their predictions. Contrary to this belief, it decreased the participants' accuracy by reducing their reliance on statistical cues. One of the factors contributing to this underweighting of statistical cues was a bias to bet on more familiar teams against the statistical odds. Finally, in a real betting experiment, fans earned less money if they knew the team names while persisting in their belief that this knowledge improved their predictions.

Original languageEnglish (US)
Pages (from-to)277-290
Number of pages14
JournalOrganizational Behavior and Human Decision Processes
Volume103
Issue number2
DOIs
StatePublished - Jul 1 2007

All Science Journal Classification (ASJC) codes

  • Applied Psychology
  • Organizational Behavior and Human Resource Management

Keywords

  • Accuracy
  • Confidence
  • Familiarity biases
  • Judgment under uncertainty
  • Knowledge biases

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