Nugget: In praise of Vagueness

Excerpt from “In Praise of Vagueness; Malleability of Vague Information as a Performance Booster” by Himanshu Mishra, Arul Mishra and Baba Shiv

“In the domains of goal setting and selfpresentation, research has found that people strategically distort vague information to perceive themselves as at an advantage. For instance, athletes were more likely to exaggerate their abilities on vague dimensions (e.g., mental toughness) than on precise
dimensions (e.g., running speed; Felson, 1981); people perceived themselves to be better than average when asked about vague abilities (e.g., driving) rather than precise abilities (e.g., parallel parking; Dunning, Meyerowitz, & Holzberg, 1989); and people indulged in favorable self-deception when they received vague feedback about their behavior (Sloman, Fernbach, & Hagmayer, 2010). In the domain of mental accounting, Cheema and Soman (2006) found that participants were more likely to incur a vague expense that could be assigned to more than one mental account than they were to incur an expense that could be assigned to only one mental account. Thus, vague mental accounts appear to allow people to overcome their self-regulation goals (e.g., saving money) and pursue their desirable spending goals.”

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“Is the eternal quest for precise information always worthwhile? Our research suggests that, at times, vagueness has its merits. Not knowing precisely how they are progressing lets people generate positive expectancies that allow them to perform better. The fuzzy boundaries afforded by vague information allow people to distort that information in a favorable manner. This latitude positively influences behavior by affecting outcome expectancies. Conversely, the very nature of precise information prevents people from distorting it and forces them to be objective about their expectancies, which in turn may have a less positive influence on performance.”

1 Comment

Filed under Fundamental Finance, Nuggets

One response to “Nugget: In praise of Vagueness

  1. Pingback: Mental Model: Evolutionary psychology « Sportgamma.net

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