Friday, December 6, 2013

Informed Choice

Recall for a moment your first job.  On the first day it's likely you didn't have much of a clue what was expected of you.  Like most people you were probably rather nervous and it was a relief when your boss gave you a relatively simple task you could easily handle.  But what if the situation had been different? What if you arrived at 9 a.m., were pointed towards an office and told to get to work.  It probably would have been rather distressing.  You'd have no idea what your responsibilities were. No idea if you should be calling clients or compiling reports or if you were any good at either.  It's far less stressful to just be given a simple task and left to do it while you acclimate to your new environment.

Yet for years the idea of more choices being better has been a common tenant of US policy creation. Wouldn't a worker be happier if he was allowed to choose his own tasks? Aren't patients more satisfied when they're making their own decisions about their healthcare? Don't retirees want to have options when it comes to their financial planning?  Like most complicated questions the answer is "It depends.".

A recent series of studies conducted at the University of Texas at Austin by Erika Patall, Breana Sylvester and Cheon-woo Han sought to explore the relationships between motivation, performance, task selection and perceived competence.  Each study attempted to trick participants into believing they had a certain competency level at word puzzles.  Participants took a test and then were given random feedback that indicated their skill level. In other words their test scores were unrelated to actual test performance. Participants were then asked to choose between similar word puzzle tasks and afterwards asked how important having a choice was to them.

Performance, motivation and importance of task selection were all highly correlated with perceived competence for a given puzzle set.  Essentially participants who believe they were good at a given task performed better, were more willing to exert themselves, and wanted more control over their choices than participants who believed themselves to be unskilled at a task.  Importantly, the participants beliefs of their competence had little relationship to their actual skill level.

What does this information mean for us on our first day at a new job or when we're making healthcare decisions?  Generally speaking, the more informed the decider the more options they'd prefer to have.  A doctor making healthcare decisions probably feels that more choices is more optimum.  Similarly, a financial planner probably would prefer a highly customizable retirement plan to a one size fits all option. However, the general public for the most part would simply prefer that the most informed party narrow down options to a best few.  When showing up for our first day on the job most of us just want to be told what to do by an experienced employee at first.  Later, when we have more information about the environment we'll start making decisions about what tasks we'd most prefer.

An interesting wrinkle of this phenomenon is that it has significant policy implications.  When it comes to crafting healthcare plans we don't often ask the public's input.  Instead we turn to groups of informed experts to craft options for us. However, as explained previously, more informed individuals are likely to prefer more choices than the average person.  Doctors are likely to create a variety of health plans geared towards serving very specific needs.  Yet when confronted with such a large selection of choices most people become confused and frustrated.  Often a better approach is to make a few simple plans that may not serve everyone as specifically as possible, but will leave participants more satisfied.

The important lesson to learn is that more choices isn't always better.  The higher an individuals believed competence level in a subject the more likely they are to desire both more choices and self determination.  Options should be tailored to the audience rather than simply covering every possibility for completeness sake.

That's all for this week. Until next time stay safe and rationale.

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