Why insider information doesn’t help you make a better decision

Researchers find we unconsciously overweight the importance of confidential information, skewing our calls

Woman in office holding a file marked “confidential”


Consider this situation: your manager tells you in secret that the company is in financial trouble and is thinking of laying off a group of people. What’s your reaction? Most people would begin worrying about their jobs and some may even start the search for new openings. This causes them to care less about their current job, behaving as if they’ve already been let go, and their behaviour, in turn, may actually result in them getting fired, even if the company originally intended to keep them.

Srini Pillay, CEO of NeuroBusiness Group, wrote about the dangers of receiving inside information in this Harvard Business Review article, and says our brains have an unfortunate tendency to overweight private information over knowledge that is publicly available, according to a new study from the University of Basel in Switzerland. Researchers found that not only do we favour inside info, but it also has a “cascading” effect, turning on some regions of the brain while subconsciously turning off others—thereby  increasing our aversion to risk while decreasing our tolerance for uncertainty.

The solution is to stop yourself before you jump to conclusions. Examine the information you have, and especially question its accuracy and relevance if you’re the only one who knows it. We need to ask ourselves: is the information trustworthy or just office gossip? (Not that there’s anything wrong with gossip.) If it is, in fact, true, have you considered other relevant information that would aid you to make the best decision possible?

A communicative and trusting office culture can eliminate the problem altogether by allowing employees to openly speak up about difficult subjects. Establishing such a culture cuts down on the need to be secretive, and frees employees from the stress and paranoia that comes with keeping things under wraps. Even better, it turns out that having information out in the open can also prevent poor judgement calls.