Ostrich Effect (Why do we prefer to ignore information that is potentially negative?)
The ostrich effect, a brief explanation
What is the Ostrich effect?
The ostrich effect is the tendency to discount and ignore information that is potentially negative.
Example
When you receive an envelope in the post and you know it is from one of your utility companies you may avoid opening it as you do not want to see how big a bill is.
The literature
Brown, A. L. & Kagel, J. H. (2008). Behvior in a simplified stock market: the status quo bias, the disposition effect and the ostrich effect. Annals of Finance, 5, 1-14. Doi: 10.1007/s10436-007.0092-0
Karlsson, N., Loewenstein, G. & Seppi, D. (2009). The ostrich effect: a selective attention to information. Journal of Risk and Uncertainty, 38, 95-115. Doi: 10.1107/s11166-009-9060-6
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