The ostrich effect is a cognitive bias that causes people to avoid situations where they might encounter information that they perceive as negative. For example, the ostrich effect could cause someone to avoid looking at their bills, because they’re worried about seeing how far behind they are on their payments.
Though the ostrich effect represents people’s natural tendency to try to avoid things that could upset them, this form of thinking is problematic when it causes people to actively avoid acquiring information that they need, just because they don’t want to deal with it.
As such, in the following article you will learn more about the ostrich effect, understand why we experience it, and see what you can do to overcome this bias, so you can improve your ability to make rational decisions.
Understanding the ostrich effect
The ostrich effect is named after the prevalent myth that ostriches bury their heads in the sand when faced with a dangerous situation. However, while the original story behind the name of this effect may be untrue, people have been observed to engage in this sort of behavior in a variety of situations.
One study, for example, found that investors tend to check up on their portfolios more frequently when markets are performing well, but will “bury their heads in the sand” when markets are performing poorly. This is the case despite the fact that checking their portfolio could help those make more informed decisions in such situations.
This form of thinking is attributed to the concept of selective exposure, which leads people to be selective in how they handle information, by choosing which new information they want to acquire and process, and which information they prefer to avoid. Essentially, people are selective in the information that they choose to deal with, and they sometimes actively avoid dealing with unpleasant news, even if those news contain important information.
As such, ostrich-like behavior is expected “in any situation in which people are emotionally invested in information and have some ability to shield themselves from it”. Based on this, selective information avoidance is predicted to occur in a variety of situations:
“They can apply, for example, to people’s decisions about when to seek formal medical diagnoses for worrisome health symptoms, to when parents will seek testing for a child who is having trouble in school, to an academic’s decision of when and whether to pursue doubts about the integrity of a student, or to a business executive’s decision to investigate—i.e., perform due diligence—when there are warning signs relating to a prospective deal.
In particular, the ostrich effect predicts that people may delay acquiring information, even when doing so degrades the quality of decision making, if knowing the information forces them to confront and internalize possible disappointments they would mentally prefer to avoid.”
— From ‘The Ostrich Effect: Selective Attention to Information‘ by Karlsson, Loewenstein, & Seppi, in the ‘Journal of Risk and Uncertainty’ (2009)
How to account for the ostrich effect
In order to mitigate the ostrich effect in your thinking, you should ask yourself the following questions when faced with making an important decision:
- Is there additional information that I can acquire that will help me make a more informed decision?
- If so, am I pursuing this additional information, or am I avoiding it?
- If I am avoiding this information, why am I doing so?
If your overall answer is that there is crucial information that you are avoiding because you don’t want to deal with it, despite the fact that it could help you make a more informed decision, then you are likely being influenced by the ostrich effect. There are several ways you can deal with this issue.
The simplest option is to actively push yourself to deal with this information, now that you recognize the fact that you have been avoiding it, and understand why you did that. However, while this is the most straightforward method, it isn’t always effective, because in reality you will often struggle to convince yourself to pursue information that you prefer to avoid.
As such, a good alternative is to set up external mechanisms which will ensure that you deal with the information that you are trying to avoid. For example, in the case of things such as stocks or bills, you can set up automatically scheduled emails, that provides you with the necessary information once a week, or once a month.
In addition, an external mechanism can also be a person who cares about you, and who can hold you accountable and make sure that you deal with the information that you need to deal with. This can be helpful in scenarios where automatic reminders aren’t as effective, such as when facing an important medical decision.
Essentially, you can choose whichever mechanism you want, as long as it ensures that you deal with the information that you need to deal with. A good mechanism is one that will reliably present you with the information that you need, without giving you an easy way to avoid it.
Note: research shows that the ostrich effect might not always play a role in your thinking. However, this isn’t crucial, since you always need to be prepared for the possibility that it will.
Deciding when it’s acceptable to intentionally avoid information
Though the ostrich effect is generally viewed as something negative, it’s important to remember that it can sometimes be reasonable to avoid negative information, as long as doing so leads to better decision making, or offers some other benefit.
For example, if you are committed to holding a certain stock in the long run and know that checking its performance constantly will make it more difficult for you to not sell it too early, then limiting your exposure to information about the stock might help you remain detached, and maintain your position.
Similarly, you might choose to avoid processing new negative information, in situations where you know it won’t influence your decision-making. This could occur, for example, if you know that there is nothing more you can do in a certain area, and receiving more information about it will only make you feel worse.
Overall, the important thing is that if you do choose to selectively avoid information, then you should make that choice in a conscious, rational manner. That is, if you do decide to avoid dealing with certain pieces of negative information, then you should do so because you believe that doing this will benefit you, rather than because you’re afraid of having to deal with news that you don’t want to hear.
The meerkat effect
The meerkat effect is a cognitive bias that causes people to become hypervigilant during periods of instability. In the financial context, this means that people tend to monitor their portfolio more frequently when markets are unstable, regardless of whether the fluctuations have an overall negative or positive trend.
This cognitive bias is referred to as the meerkat effect since “apocryphal meerkats stick their heads up to look around whenever something happens”.
The meerkat effect is mentioned here in relation to the ostrich effect, due to the similar way in which these two biases influence people’s information-acquisition strategy. However, there is a notable difference between the two biases, since the meerkat effect leads to an increased interest in acquiring new information, while the ostrich effect does the opposite, and leads to avoidance of new information.
Nevertheless, the meerkat effect can coexist with the ostrich effect, and people are sometimes influenced by both biases simultaneously. As such, even when market fluctuations lead people to check their portfolio more frequently, they tend to check it more often when their stocks have an overall positive return, compared to when their stocks have an overall negative return.
This suggests that even when lack of certainty causes people to seek out new information in order to make better-informed decisions, due to the influence of the meerkat effect, those people will still be less likely to acquire new information when they fear that it might be negative, due to the influence of the ostrich effect. As such, you should be wary when faced with an unstable situation, where you might want to avoid acquiring new negative information, even if you feel that you’re acquiring more information than you would normally.
Specifically, you shouldn’t let the fact that you’re pursuing more information than normal make you ignore the fact that you’re still avoiding information which could be beneficial. Essentially, you should always use the questions we saw earlier, and ask yourself whether there is additional information you could find that will help you make more informed decisions.
Summary and conclusions
- The ostrich effect is a cognitive bias that causes people to avoid situations where they might encounter information that they perceive as negative.
- The name of this effect comes from the myth that ostriches bury their heads in the sand when faced with a dangerous situation.
- This form of thinking is attributed to the concept of selective exposure, which is when people selectively choose which new information they want to process, and which information they prefer to avoid. In the case of the ostrich effect, this avoidance occurs because people feel emotionally invested in the situation, and want to shield themselves from having to deal with bad news.
- To counter the ostrich effect, you should ask yourself whether there is additional information you can acquire that could help improve your decision-making process, and whether you’re choosing to avoid this information just because you don’t want to hear it. In addition, you can set up external mechanisms, such as automated emails or a person you trust, which can help hold you accountable and ensure that you face information that you might otherwise choose to avoid.
- Keep in mind that sometimes it can be a valid decision to avoid negative information, when doing so leads to better decision-making. The important thing is to make the decision to do this in a conscious and rational manner, based on the fact that you believe that avoiding the new information will be more beneficial to you than acquiring it.