Study: Individuals value information as they do material objects

information
Credit: Pixabay/CC0 Public Domain

Technology has enabled the creation of a vast and growing amount of information, leading to benefits (e.g., more data to learn from) as well as drawbacks (e.g., the spread of fake news and conspiracy theories). New research sought to determine how and why people value information. The research found that people grow attached to information just as they do to physical objects, even when that information cannot be translated into material outcomes.

The findings, by researchers at Carnegie Mellon University (CMU) and the University of Innsbruck, appear in the Proceedings of the National Academy of Sciences (PNAS).

"We often talk about interacting with information as if we are consuming something, and we describe our attachment to personal beliefs as holding onto or letting go of something," says Christopher Olivola, Associate Professor of Marketing at CMU's Tepper School of Business, who coauthored the research. "But while the valuation of money and has been studied extensively, surprisingly little research has focused on how we value information."

According to conventional economics and , information is valued solely to the extent that it supports decisions that yield better outcomes. But this view does not fully explain how individuals engage with information, such as our willingness to pay for information that doesn't impact us in any tangible way (e.g., purchasing celebrity gossip magazines) or our tendency to avoid information we think goes against our beliefs (e.g., only consuming news from sources that share our views).

In three studies—involving more than a thousand participants—the researchers demonstrated that people treat gains and losses of information as they do gains and losses of goods: as cherished possessions. They did so by showing that loss aversion (the tendency to feel worse about losses than to feel good about equivalent gains) and the (the tendency to value objects we own more than identical objects we do not own) apply not only to money and tangible goods but also to information—even largely useless information (e.g., random trivia facts).

While the three studies focused on information that was largely irrelevant to individuals, the authors suggest that the pattern of results they document likely also applies to information that is consequential. As such, the findings could have implications for situations in which people are encouraged to value useful information, such as in the domains of education and health care. The findings might also help guide research and shape policy about online consumer privacy—for example, understanding whether and when consumers think of as possessions likely shapes their views toward having such information gathered and shared by firms and governments.

"Identifying loss aversion and the endowment effect for information may be particularly relevant in the digital age, when individuals' unprecedented access to complicates and can change the way we value it," suggests Yana Litovsky, a Postdoctoral Researcher in the Department of Banking and Finance at the University of Innsbruck, who led the research.


Explore further

New research puts your online privacy preferences to the test

More information: Yana Litovsky et al, Loss aversion, the endowment effect, and gain-loss framing shape preferences for noninstrumental information, Proceedings of the National Academy of Sciences (2022). DOI: 10.1073/pnas.2202700119
Citation: Study: Individuals value information as they do material objects (2022, August 17) retrieved 25 September 2022 from https://phys.org/news/2022-08-individuals-material.html
This document is subject to copyright. Apart from any fair dealing for the purpose of private study or research, no part may be reproduced without the written permission. The content is provided for information purposes only.
544 shares

Feedback to editors