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Experience vs. Information, Part 2

I recently blogged about whether we form our opinions more from information than experience. The starting point was a passage in David McCullough‘s book The Great Bridge, and he was comparing modern Americans with our 19th-century counterparts.

I was interested not just as a historical comparison but because the information/experience question is compelling in its own right. Consider a doctor, for instance: as Jerome Groopman writes very well in How Doctors Think, the act of diagnosing a patient is a tricky blend of science (relying primarily on information) and art (relying primarily on experience).

Or pretend for a minute that you’re Manny Ramirez facing Mariano Rivera with an 0-2 count with two outs in the bottom of the ninth inning in the seventh game of the A.L. Championship Series, and you know that Rivera throws a breaking pitch away in 80 percent of such instances — but you also know that he struck you out with a high fastball last night with the same count. (What with Manny being Manny, this may not be the best example.)

But rather than my speculation, let’s hear from someone who’s done some actual research on this question.

Greg Barron, an assistant professor in negotiation, organizations, and markets at the Harvard Business School, e-mailed in response to the earlier post to share with us “what we know so far” about “my favorite topic, decisions from experience.”

Here are Barron’s summaries of two papers he has co-authored. The first, published in Psychological Science, is called “Decisions From Experience and the Effect of Rare Events in Risky Choice.”

1. Decisions made from personal experience and those made from information (what we term “description”) are qualitatively different — in particular regarding rare, but important, events that are overweighted in information-based decisions (see Prospect Theory) but underweighted in decisions from experience. For example, consider G. Gigerenzer‘s observation that more people were killed in the increase in traffic accidents after 9/11 than were killed in the attacks themselves. Risk on the road is learned from experience, and is underweighted.

2. When people have both sources of information, description and personal experience, we find behavioral inertia for whatever information was encountered first. Thus, in the 80’s people who had been practicing unsafe sex for 30 years were not as impressed by the AIDS epidemic as today’s teenagers who are scared silly (despite the rate of HIV transmission with an actual AIDS partner being as low as 1/1000). More neat applications (ex. Vioxx) are in the paper.