Decision Making in Information-Rich Environments: The Role of Information Structure

Abstract

Today's consumers are often overloaded with information. This article argues that traditional approaches to measuring the amount of information in a choice set fail to account for important structural dimensions of information and may therefore incorrectly predict information overload. Two experiments show that a structural approach to measuring information, such as information theory, is better able to predict information overload and that information structure also has important implications for information acquisition. A Monte-Carlo simulation, in which decision rules are applied to multiple information environments, shows that the amount of information processing mediates the relationship between information structure and information overload.