Information bias is the tendency to seek more information than is actually useful for making a decision — the belief that more data will always lead to better decisions, even when additional data is irrelevant.

When More Information Hurts

Additional information has diminishing returns. Beyond a certain threshold, more data increases cognitive load, introduces noise, and increases the number of irrelevant variables that can skew judgment.

The Medical Diagnosis Study

In studies of clinical judgment, doctors given more patient information beyond a critical diagnostic threshold did not make more accurate diagnoses — but became significantly more confident in their (unchanged) accuracy. More information inflated confidence without improving correctness.

Where This Appears

• Analysis paralysis — gathering more data to delay a decision that already has sufficient information
• Market research that provides false precision to intuitive product decisions
• Investment research beyond base-rate fundamentals

The Test

Before seeking more information, ask: What would I decide with only what I already know? Then ask: What specific new information could change that decision? Only gather data that could actually change the outcome.

Reference:

Wikipedia: Information Bias

https://en.wikipedia.org/wiki/Information_bias_(psychology)