Our natural inclinations tell us that the more information we have, the better decisions we can make, according to the author. However, thanks to one grocery store study, the opposite might be true. Read how a jam taste test proves that information overload can actually stymie a fraud examination.
In 2005, Sheena Iyengar, a professor of business at Columbia University, set up a taste-testing table at a gourmet supermarket in California. Customers were met with either a selection of 24 different jams to taste or a selection of six jams to taste depending on when they walked through the store.
When 24 samples were made available, 60 percent of patrons stopped at the table to sample the jam and to receive a $1 coupon. Alternatively, 40 percent of patrons stopped when six samples were presented. Considering more customers stopped when there were more samples, it'd seem likely that having a greater number of jams to taste would lead to a higher sales percentage.
In fact, the opposite was true. Thirty percent of customers purchased a jar from the table with six jams while only 3 percent of customers purchased a jar from the table with 24 samples. (See
Too Many Choices: A Problem That Can Paralyze, by Alina Tugend, The New York Times, Feb. 26, 2010.)
Our natural inclination tells us that we can make better decisions when we have more information. But the study above proves the opposite: We actually can have too many choices. Psychologist Barry Schwartz refers to the problem of having too much information as "choice paralysis." His and other studies show that we're less likely to take action or feel satisfied with our decision when we have too many choices and too much information. (See
The Surprising Poverty of Too Many Choices, by Kristi Hedges, Forbes, Nov. 26, 2012.)
Because so much information is available, fraud examiners might hesitate (choice paralysis) to use the data they have believing that eventually there'll be even more — and better — information, which would help them make wiser decisions. Having so much information at their disposal, fraud examiners often get stuck trying to decide when it's prudent to delay or act.
Fraud examiners aren't the only people experiencing information overload. In a 2010 survey conducted by LexisNexis, 62 percent of employees claim their work quality suffers because they can't sort through all the information available to them. (See
Is Information Overload Killing Your Productivity? by Lindsay Broder, Fox Business, Sept. 25, 2013.)
The information available in our technologically driven world is almost infinite. And fraud is typically referred to as a "paper case" because organizations collect so much data, which leaves fraud examiners lost.
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