“Do you want the good news or bad news first” is an age old question. I wonder if which we choose tells something about how we are wired up?
The economics of information is a fairly new field of study (1982 Nobel prize winner George Stigler is credited with starting this field in around 1961) (Loewenstein 2006). With our current financial crisis the economics of information might be particularly relevant. Four weeks ago (first week of September 2008) there did not appear to be an economic cliff in front of us – now people are talking about the worse crisis since the depression.
It only make sense that information can be painful or pleasurable (be it economic of more personal social information) – back to: “do you want the bad news or good news first?”
You can think of the delightful anticipation of a special birthday present. As a kid did you want to search the house and find your present (maybe when you were really young) or did you get pleasure in the anticipation?
Research suggests (Berns et. al., 2006) that the information that you will receive pain activates the pain receptors in the brain and thereby the anticipation of pain is painful. The experimenters hooked up a shocking device to the feet of people laying in a fMRI scanner then let the subjects choose when they got the shock. For example they could receive 90% (of max voltage) shock levels in 3 seconds or 60% in 27 seconds. When the voltages were the same for the early or delayed 78.9% of the time the subjects choose to take the shock early, get it over with. Some subjects were even willing to take a higher early shock level rather than wait. With the delay the anticipation of pain ramps up with time and therefore people are dreading the future outcome of the shock. The dread of waiting for the negative outcome is unpleasant so we choose to shorten the dread period.
Standard economic theory predicted that we should delay unpleasant outcome and want to immediately enact on pleasurable outcomes.However, in the above experiment they choose not to delay the unpleasant outcome.
If we think of good news then in regards to the above experiment you want to hang onto this pleasurable anticipation because it feels good – and you almost get this for free since you are not actually consuming the object (say the birthday present).
While this may work out in the case of presents which we know will be something ‘good’, but what about the normal situation in life of when you do not know if the information is going to be bad or good? Then do we want to wait or get it over quick as possible? There might even be individual differences of how we handle unpredictable information. Do you want the good news or bad news first?
Some of us might even choose to remain in the dark – not know the information? I think I am predisposed to wanting to know all the information I can get my hands on – be it good or bad.
You can think about the use of personal genomics that give rough percentages of how likely you are to get disease X, or very particular genetic testing that gives you a definitive diagnosis. Do you want to know this information or not? A certain percentage of people avoid visiting the doctor because they don’t want to know the possible bad news. This seems to be the opposite of the study above of if they know they are going to get a shock most people want to get it over rather than wait and suffer the dread. The difference with medical information is you don’t know it will be bad and you would rather just not know.
Going back to economic information did we at personal, national, and world level try to ignore, or remain ignorant, over the reality of the financial problem? Was it like many who just don’t want to go see the doctor, get the bad news? I am not sure of the answer but I know there is a whole bunch of bad news out there – that maybe if we paid attention to earlier (preventative treatment) we wouldn’t be facing such extreme conditions.
It might be if the outcome is decided (e.g. shock) we want to get the bad information over with, and delay the good news. But in the messy real world when we really don’t know what the information will bring we appear to delay the possible negative information (e.g. economic reality of overspending, going in debt over our heads, etc).
Personally, I would choose to know – both bad news and good news – soon as possible, be it pure information or the messy reality kind. It is easier to make life decisions when you know the vital information.
Let me know what your ‘view’ of the situation is, share information with me – I want to know.