Ostrich Effect

The ostrich effect was coined by behavioral economists to describe the behavior of investors, but it can crop up in pretty much any area of life, from personal finance, to project management, to health. And it’s more pervasive than many people may realize. According to one poll, almost half of US adults don’t know the annual interest rates on their credit cards,¹ while another study found that 20% of people enrolled in a weight loss program had never weighed themselves before.²

The ostrich effect can be a serious drawback to tackling societal problems, such as climate change. Because it’s so overwhelming to contemplate the severity and complexity of these issues, it’s often easier for elected officials to just ignore them entirely, and to reject information that contradicts their official stance.

The ostrich effect has a couple of different meanings, depending on the context. In finance, this bias was coined to describe a specific pattern of investor behavior. Some investors were apparently sometimes more willing to make investments if the level of risk associated with it was unreported, compared to similar investments with established risk.³ In psychology, however, the ostrich effect usually refers specifically to people’s reluctance to get feedback on their performance, even though that information would help them to monitor their progress and successfully work towards their goals.²

It might be tempting to write off the ostrich effect as simple laziness. But people often go out of their way to avoid getting this kind of information, even when it’s accessible and easy to use—like investors seeking out investments with unreported risk. A more relatable example might be that of a college student who does not read a professor’s feedback on their paper, even if they want to do better in the course. In fact, generally speaking, people are motivated to assess how they are doing and to strive for self-improvement.² In spite of our good intentions, there are a few other forces at work within our psyche that can contradict, and overpower, the desire to perform better.

We’re sensitive to losses… so sometimes we just ignore them

Humans are notoriously loss averse: we hate losing things. The pain that we feel when we incur some kind of loss is greater than the pleasure we get from an equivalent gain. To illustrate, imagine somebody offers you a gamble on a coin toss. If the coin comes up heads, you win $150, but if it comes up tails, you lose $100. Would you take the bet?

Obviously, $150 if greater than $100—you stand to gain more than you stand to lose. But for most people, the potential pain of losing $100 is stronger than the joy of winning $150. Research has shown that, in order to be willing to take this gamble, most people need to be offered at least $200. In other words, the potential gain needs to be fully twice as large as the potential loss.⁴

Our fear of losing can sometimes make us a bit short-sighted. Myopic loss aversion occurs when people lose sight of long-term gains because they’re focused on short-term losses. Investors, for example, often underinvest in assets that carry more risk, because they’re afraid of incurring losses in the short term. However, this can lead them to lose out in the long term, since riskier investments have higher returns.⁵

Outside the world of finance, myopic loss aversion means losing sight of our big-picture goals because we are preoccupied with the costs of working towards them. The college student striving for an A in their course may genuinely want to improve, but the immediate suffering that comes with reading a professor’s feedback (and being made aware of their shortcomings) looms larger in their mind than the pride that they’ll feel in the future. This dynamic often gives rise to the ostrich effect: People often prefer to be blissfully unaware of information that’s hard to swallow, even if that information might be useful in the long run.

We are biased towards the positive

In general, humans have a strong preference for positive information. This bias runs deep, right down to automatic processes that are mostly outside of our control. We tend to make optimistic predictions and have optimistic expectations; we are more likely to remember positive events than negative ones; and, most important for the ostrich effect, we pay more attention to positive information.^6,7 By the same token, our excessive optimism often leads us to downplay negative information and to reject more pessimistic forecasts of how the future might play out.⁸ This bias is at the heart of countless other cognitive distortions, such as the planning fallacy, the Dunning-Kruger effect, and self-serving biases.

Our preference for the positive is a big reason that people stick their heads in the sand. In one study by Betty Chang and colleagues, where participants were asked to think of situations where they had avoided monitoring their progress and then rank reasons why they hadn’t self-monitored more, one of the most frequent explanations given was that people experienced negative emotions when they thought about working towards their goal.⁹ People also reported worrying about receiving negative feedback or being told that their progress wasn’t good. The anxiety of facing down a challenge is often enough to deter people from really trying.

We’re trying to protect our ego

Beyond our general dislike of negativity, the ostrich effect is driven in large part by our desire to maintain a certain self-image. We have a deep-seated need to feel good about ourselves, and as a result, we often bend our perceptions of reality just a tad, in order to protect our ego. This is known as a self-enhancement motive.¹⁰

Self-enhancement motives can bias our cognition in surprising ways, helping us to zoom in on our successes while minimizing the impact of our failures. One study, for example, found that a majority of people view themselves as above-average drivers. This finding on its own is evidence that people inflate their perceptions of their own abilities since it’s mathematically impossible for everybody to be “above average” at something. But the real kicker is that people continue to insist that they’re better at driving than most even after they’ve caused an accident and been hospitalized.¹¹ 

Clearly, our drive for self-enhancement can powerfully sway the way we see ourselves, even putting us at odds with reality. This motive also guides our behavior when it comes to seeking feedback or guiding information. Even if we know, on some level, that we’re not doing a particularly good job at something, it can still be psychologically painful to confront this possibility. Because of this, we tend to avoid situations that threaten to confirm the negative beliefs we have about ourselves.

This fact was demonstrated by one study, where students solved anagrams that were either difficult (e.g. TAUCYI—Acuity) or easy (e.g. ZYIDZ—Dizzy). People who were given the trickier anagrams were likely to come out of this task not feeling too hot about themselves, while people given the easy ones were likely to feel pretty good. After finishing with this initial task, participants were told they had to pick some more anagrams to solve from a number of different tests, and were given information about how students of high and low ability tended to perform on each test.

Students who had been given difficult anagrams were less likely to choose tests that were highly diagnostic—meaning, tests that had a big gap between the performances of high- and low-performing students. Instead, they chose tests where the high- and low-achievers performed similarly because a person’s score on this kind of test doesn’t really tell you anything useful about their abilities. By turning down meaningful feedback, participants avoid having their insecurities confirmed.¹² The ostrich effect can be born out of this same instinct to preserve our ego.

We’re afraid to change our beliefs

In the same survey mentioned above, the biggest reason that people gave for not monitoring their own progress was that they were afraid that implementing the feedback would require making a change to their beliefs, or to their behavior. This might just signal a lack of willingness to put in the effort to succeed, and that might play a role in some cases—but there’s more to it than that.

The desire for psychological consistency is a major determinant of our behavior. It’s behind one of the most robust effects in psychology, cognitive dissonance, which describes how people maintain their existing beliefs by rejecting new information, rationalizing it away, or adjusting their perceptions.

The core idea, first proposed by social psychologist Leon Festinger in the 1950s, is that people experience intense psychological discomfort when they hold contradictory cognitions (basically, beliefs or feelings).¹³ When this tension arises, we feel deeply anxious until we can resolve it. Festinger famously illustrated the power of cognitive dissonance by embedding himself in a doomsday cult that had predicted that the end of the world would occur on a specific day. When the prophesied apocalypse failed to materialize, instead of realizing that they had been wrong, members of the cult doubled down on their beliefs, proselytizing and recruiting new members.¹⁴

When we’re committed to an idea, or invested in a specific way of seeing the world, we will go to great lengths to cling to our beliefs. Arguably, the ostrich effect is an offshoot of cognitive dissonance: it enables us to avoid information that disconfirms our established worldview. We’re especially biased to reject information that contradicts our established self-concepts, a drive that is known as the self-verification motive.¹⁰

Many studies, across many different fields, have found evidence of the ostrich effect at work. The temptation to bury our heads in the sand is probably greatest when the stakes are high—which also, unfortunately, means that the ostrich effect can have very serious consequences, both at the individual and societal levels.

Take, for example, the case of diabetic patients and blood glucose monitoring. For people who have diabetes, it is essential to make sure that the amount of sugar in their blood stays within a certain range. To this end, there are inexpensive and easy-to-use tools available to help them monitor their levels of blood glucose. And yet, studies have found that most people with diabetes do not regularly self-monitor their blood sugar.² Personal finance, as mentioned above, is also an area where the ostrich effect can wreak havoc. According to one British survey, only 10% of people who reported financial anxiety actually checked up on their finances at least once a month.²

The ostrich effect can also hold us back from addressing larger-scale problems, such as climate change. There is scientific consensus that climate change is a real, man-made problem, and it will require immediate, decisive action in order to avert its most disastrous consequences. And yet, many politicians have responded to this threat by ignoring and suppressing information about them. In 2012, for example, lawmakers in North Carolina made it illegal to base coastal policies on the latest scientific predictions of how much sea levels would rise due to climate change.¹⁵ Ordinary citizens are also guilty of burying their heads in the oil sands, with 18% of Americans believing either that the climate is not changing, or that human activity has nothing to do with climate change.¹⁶

Though it can be tempting to run away from constructive criticism, in the long run, we’re almost always better off knowing where we stand and how we can improve. Although it may take a little determination, it’s definitely possible to get around the ostrich effect.

Focus on the big picture

Whether you’re trying to improve your health or trying to decide how to invest, it’s helpful to try to adopt a long-term mindset. When you feel yourself getting bogged down in temporary setbacks and disappointments, try to remind yourself of your ultimate goal, and focus on the reasons that you decided to do this in the first place. Although the losses might still sting more, this can help to offset the pain of receiving constructive feedback.

Try being mindful

Mindfulness has been a hot topic over the past few years. Most of the time, people seem to talk about mindfulness meditation as a tool to improve focus and productivity. But at its core, mindfulness is just about paying attention to your experiences as they unfold, nonjudgmentally observing what’s going on inside your mind. Mindfulness is often used as a tool to interrupt harmful patterns that people have fallen into: instead of blindly following an emotional response or instinct, people can simply note that the impulse exists, and then move on from it.

Mindfulness can help combat the ostrich effect by allowing us to distance ourselves from our anxiety about receiving feedback.¹⁰ By taking a second to examine how we’re feeling and what we’re thinking, we might be able to recognize that our resistance to this kind of information isn’t necessarily rational and that it might be holding us back. Many studies have provided empirical evidence that mindfulness practice improves people’s self-knowledge.10

Be kind to yourself

A key element of mindfulness is that it is non-evaluative and nonjudgmental.10 The point isn’t to catch yourself out or chastise yourself for slacking off. After all, nobody’s perfect, and there’s no reason to feel ashamed of your faults. Not only is it unnecessary to be hard on yourself, it’s also counterproductive, and will probably only add to the negative emotions surrounding your goals and receiving feedback.

The ostrich effect was first coined by Israeli economists Dan Galai and Orly Sade, in a 2006 paper about investor behavior. They named it based on the common (and, disappointingly, untrue) belief that ostriches try to avoid predators by just sticking their heads into the sand.

Galai and Sade were inspired by the work of behavioral economists Daniel Kahneman, Amos Tversky, and Richard Thaler. Kahneman and Tversky, two of the “founding fathers” of behavioral economics, developed the concept of loss aversion in the 1970s, showing that “losses loom larger than gains.”⁴ Thaler, who frequently collaborated with Kahneman and Tversky, is well known for his work on mental accounting, which describes how people assign subjective value to money depending on the situation. Thaler also coined myopic loss aversion, alongside another economist, Shlomo Benartzi.³

Receiving constructive criticism from coworkers and superiors is an important element of any job, and essential for employees to improve in their work. However, because of the ostrich effect, many employees don’t seek out feedback, hurting both themselves and their organizations.

Research has found that the drive to protect one’s own ego often holds people back from asking for feedback at work. The same study also showed that, in environments where people didn’t tend to go looking for constructive criticism, people were reluctant to seek feedback because they worried about how other people might judge them for doing so. These findings underline the importance of creating a workplace culture that encourages people to ask for feedback on their performance.¹⁷

Many people care about the problem of climate change, but given the complexity of the problem, it’s difficult to know how to address it. Unfortunately, research has found that feeling unknowledgeable about an issue can give rise to the ostrich effect, especially when the problem is urgent.

In one study, participants read a short passage about a possible oil shortage. For one group, the text said that the US would have enough oil to last another 240 years; for the other group, it said that oil would start to run out in 40 years. After they had read the passage, participants completed a questionnaire that assessed how interested they were in learning more about the issue. People who felt less knowledgeable about energy resource management were more avoidant of learning more about the problem, but only they had read the version of the text that presented an oil shortage as an urgent problem.¹⁸ This finding suggests that, even as people become more aware of how serious the threat of climate change is, this might not prompt them to act, and instead could lead to more avoidance.

What it is

The ostrich problem describes how people often avoid learning negative information or seeking feedback on their performance.

Why it happens

People are biased towards positive information, and are also motivated to protect their own egos. The desire for psychological consistency also plays a role.

Example 1 – The ostrich problem and job performance

People often refrain from asking for feedback at work, largely to protect their ego, and because they worry about how other people will perceive them.

Example 2 – The ostrich problem and climate change

When people feel unknowledgeable about a problem, and that problem is urgent, they are likely to avoid learning more about it. This has implications for how we approach climate change education.

How to avoid it

To avoid the ostrich effect, try some mindfulness exercises, and try to remind yourself of your long-term goals.

Are You Making Bad Financial Decisions Because of Information Avoidance?

This article explores how the ostrich effect can hurt people’s efforts to manage their personal finances, and explores some more reasons why people avoid useful information.

Tackling Climate Change (½): Why Don’t We Act On Climate Issues?

The ostrich effect is one of many barriers to addressing climate change. This article, the first of two parts, explores some more reasons that this topic is so cognitively challenging.