You Don’t Pay Enough for Information

Some time ago, I read a forum discussion involving one student asking for advice about getting into grad school. One of the commenters gave an unusual piece of advice: before you commit to a university, a lab, or even grad school itself, do one year as a paid research assistant.

It’s unusual advice because most people wouldn’t consider it. Why spend a year as a research assistant which won’t count towards completing a degree?

The answer is information. This person didn’t know what they wanted, so doing a test year will give information as to whether or not the person actually likes doing research.

Personally, I’m not familiar enough with success criteria in academia to comment on whether this research assistant strategy is underused. Perhaps some of the more experienced readers can comment on whether the signalling pros and cons might outweigh the information advantage.

Nonetheless, it strikes me as an interesting example of paying for information. In this case the information isn’t a book or seminar, but information about the world—how much this person wants to pursue a research career and how to do so.

Paying for the information (in this case, with a year of your life) is expensive. But the benefits can often outweigh the cost and turn a potentially risky decision into a safe one.

Reality is Strange

Information is valuable because reality is strange. Strange in ways we rarely appreciate or anticipate.

A big part of the problem is something called hindsight bias. This is a well-documented effect that shows that if you give people a piece of information, along with an intuitively appealing explanation, people will say the information is obvious. They still feel this way even when they were lied to and the truth is the exact opposite of what they felt was obvious.

Because of this problem, information, once acquired, is often quickly devalued as something we, “knew all along.”

Consider our research assistant example. Reluctantly, he follows the advice and takes up a year working as an assistant. It turns out to be everything he feared—the research is dull, everyone around him is overworked and the subject which seemed so interesting from afar now feels too specialized to make a real difference. After a year of this, he leaves the field disillusioned after having wasted a year of his life.

Or maybe, instead, he starts the research path and discovers that he loves the field. Research, as opposed to classwork from his undergrad, is exciting and groundbreaking. He loves being surrounded by other intelligent, ambitious people and can’t imagine a different life. In doing so, however, he realizes that he could have started his PhD a year earlier and now his career has been needlessly delayed.

In both cases, the truth seems obvious. Of course research work is cutthroat and self-sacrificing. Of course it’s noble and inspiring. In both cases the year feels like a waste, even though it has provided the key information needed to make an important decision.

I believe the remedy for this situation is realizing how unexpectedly strange reality can be. The opposite of a seemingly good idea, can also seem to be a good idea. Only by gathering information can you tell the difference.

Most Information isn’t Free

The internet has made nearly free access to tremendous amounts of information something we take for granted. Wikipedia, funded entirely through donations, dwarfs the libraries of even the most prolific and well-funded book collectors.

Because so much information has become cheap or free, there’s a tendency to believe that most information can be acquired free of charge, or that the most important information is free.

I disagree. Most information is and will remain expensive. It’s expensive because it’s difficult to acquire. This difficulty pushes against the relatively free distribution cost the internet enables. Which wins out depends crucially on what kind of information it is.

The most general information is the most likely to be free. Wikipedia is a good example, containing summaries of topics which are universal.

More local information will be more likely to be expensive. Consider the decision to go into academic research as an extreme example. Many aspects of that decision: information about schools, fields of study and scientific advances, are general enough to likely be fairly cheap. The decision about whether you will personally enjoy the career dimensions of research work apply to just one person, you, and so are a lot more expensive to acquire.

Middling categories of information, which is neither completely personalized nor completely generalized might fall into an intermediate camp. Some of your questions about research might be answered by sitting down and interviewing past grad students of the lab you’re considering. Not as easy as a mouse click, but less costly than a year of research.

Pay More for Information

There seems to be a stereotype between two types of people. The nervous bookworm, who does endless research but is afraid to actually go out and do anything. And the aggressive decision-maker who goes with his gut and takes on big risks despite uncertainty.

This picture, often advocated by motivational speakers and self-help platitudes, makes it seem as if overcoming internal doubts and uncertainty is mostly a matter of summoning up the courage to act.

But there’s a middle road between paralysis and bravado. That’s the road where you avoid a lot of the fear, self-doubt and uncertainty by making carefully chosen actions to gain more information before moving onto bigger decisions.

Since a lot of this testing and tweaking is low-profile, many of the people who seem to be able to consistently take huge bets and win, are actually engaged in a sophisticated process of risk minimization by gathering more information. Whenever a big bet is laid, the research has been so meticulous that much of the uncertainty was resolved long before.

Information and Entertainment

Another confusion about gathering information comes from people who read too many books or blogs about making life improvements but never act on the advice. This could reasonably be construed as spending too much time gathering information and not enough time taking action, but I’m not sure the critique is as solid as people make it.

Self-improvement can have an information content—thus competing with other routes to gaining information such as education, research or experimentation. But it also has an entertainment component—and thus is a substitute for television, movies and video games.

Much of the potential source of books and blogs to become a distraction seems to me to come from this entertainment aspect. Just like anything else you enjoy for its own sake, it can become a distraction.

Gathering information when done for the specific purpose of trying to help you take on a more ambitious goal or make a hard decision doesn’t suffer from this temptation as much.

How to Pay for Information

Information is expensive to acquire but cheap to disseminate. Unsurprisingly, that makes it hard to monetize and therefore a lot of information which you might find useful simply has no seller. Therefore, most of the ways to pay for information have to be paid for in time, not money.

Here are some of the best ways to pay for information:

1. Talk to people with experience. Want a job? Talk to people who previously had it. Thinking about moving to a new city? Talk to people who live there. Our similarities as human beings far outweigh our differences, so talking to lots of people who have previously made the same decision you’re facing will reduce uncertainty.
2. Do pilot projects. Don’t go all-in. Try to break down your ambition into something smaller and test it out over a short period of time. I do this with every product I launch and every project I pursue. Before I announced the MIT Challenge, I did a test course under the time constraints I knew I’d need to reach.
3. Develop good online research skills. Many decisions are simply too big to not be extremely well-researched. Having good online research skills should enable you to become a near-expert on any subject.
4. Seek outlier experiences. Travel, especially if it’s deeply immersive, is a good way of learning about yourself by being in completely new environments. So is learning another language, trying new habits and applying temporary constraints on your life.
5. Master the general, before the specific. Personal experience is rich in detail, but susceptible to many biases. Getting a broad, scientific understanding of a field can’t answer all questions, but it can avoid the worst kinds of errors.

Have any other suggestions that you’ve found personally valuable? Please share it in the comments!