One of the greatest collective achievements of humanity over the last 50 years is our increased connectedness. We can commute domestically between major cities in a matter of hours, or even minutes. And we can take a flight to the other side of the world in less than a day.
Ordinarily, there may be anywhere between 8,000 and 20,000 flights in the air at any given moment, according to FlightRadar24, a real-time flight tracker. Even at the time of writing, amidst the most serious global pandemic since the 1918 flu pandemic, there were almost 7,000.
But our connectedness doesn’t end there. We are also deeply connected by digitalisation. Internet-based communication tools have broken down geographical barriers and given us access to real-time information from across the world. We can share thoughts, feelings and data on open networks with the world. And we can track our personal metrics in real time – our health, our habits, our money.
On balance, this has been good news for humanity. But right now, our connectedness is part of the problem (it may well also prove to be part of the solution). Our capacity to travel quickly between places is spreading biological contagion rapidly. And as I wrote last week, our capacity to share information quickly is spreading unhelpful emotional contagion like wildfire.
It’s the consumption of information which is the focus of this article. When confronted with crises, psychologists have shown that we typically adjust the way in which we consume information and the rate at which we check it. As we are only at the beginning of this crisis, it’s worth getting to grips with this now, before some of the negative aspects of this psychology take hold.
To do this, we must take a short journey into the animal kingdom. And that journey begins with ostriches.
The Ostrich Effect
The ostrich effect refers to the idea that we attempt to avoid negative information. The name comes from the idea that ostriches bury their heads in the sand to avoid danger (which for the record, they don’t).
In behavioural finance, the ostrich effect is present where investors avoid negative financial information. In the face of the record-breaking daily drops in markets we’re currently seeing, the ostrich effect would predict that most of us will check on our investments less frequently. We have an idea of how bad things are, so why put ourselves through the pain of checking?
Research published in 2009 tested this idea with datasets of Scandinavian and US investors. The results found a clear bias for monitoring portfolios in rising markets ahead of falling markets.
The Meerkat Effect
That’s not where the story ends, however. A follow-up study by a group of researchers from the UK identified a conflicting perspective, which they termed the meerkat effect.
The meerkat effect refers to the idea that we become hypervigilant in the face of particularly negative or positive information. In other words, we see the opposite to the ostrich effect, increasing our consumption of information in the face of negative circumstances.
In the finance world, as markets crash, the meerkat effect predicts that investors will monitor their portfolio more, not less. As the researchers put it, “we behave more like hyper-vigilant meerkats than head-in-the-sand ostriches”.
The Ostrich-Meerkat Spectrum
What should we make of all this?
The first conclusion we can draw is that academics don’t always agree. But in this case, there is a good reason why not.
Crises reveal stark differences in our psychology. Some of us are ostriches, some of us are meerkats, and some of us are somewhere in between.
As we confront our latest global crisis, it’s worth giving this some thought.
Being an over-informed meerkat can do us more harm than good. Checking our investments with hyper-vigilant frequency can distort our investment choices. Similarly, consuming too much of the information that surrounds a crisis can breed unhelpful anxiety and emotional contagion.
But on the other hand, being an under-informed ostrich carries its own set of risks. Not monitoring our finances like normal can lead to the avoidance of necessary, albeit difficult, financial decisions. It also means missing out on the opportunities that crises can bring about. The problems extend beyond the financial, too. Failure to stay up to date with guidance during a global health crisis could risk lives.
The punchline, as you may have guessed, is that we need to find the middle ground on what I call the ostrich-meerkat spectrum. We need to direct our Paleolithic instincts to protect ourselves towards a more balanced approach to information during a crisis.
And this has never been more important.
Finding the Middle Ground
So among the blur of noise or blissful silence, how does a meerkat or ostrich find the middle ground?
Here are three simple ideas for optimising your information management.
#1: Regulate your information. Set some simple operating procedures for how and when you use digital information sources. What source will you check, at what time, and for how long? Stick with these procedures even in trying times. (In Digital Minimalism (UK, US) Cal Newport makes a powerful case for such procedures.)
#2: Filter and limit your sources. Filter your news and communication channels to provide objective, well-balanced perspectives. Avoid the temptation to retain only the information sources that support your beliefs. This is classic confirmation bias. Finally, scrap or significantly limit the rest.
#3: Check yourself. If you find your information habits changing as a result of negative circumstances, ask yourself if it’s sensible to be checking information more or less than you were before. What risks does avoidance of negative information create? And what value does an increase in your exposure create? Be honest with yourself when answering.
The Power of Well-Managed Information
A crisis requires a rational head. And a rational head isn’t buried in the sand nor excessively exposed to the dangers around it. A rational head is appropriately informed.
In short, the optimal answer to the question in this article’s title is neither.
If you’re a self-identified ostrich or meerkat, there is no shame in that. But now is as good a time as any to think about how you can return to the optimal middle ground. Consider this crisis an opportunity: to optimise your information management, and to discover the power of well-managed information.