Certainty EffectOpen Access

Certainty Effect

We crave clarity over chance and make costly sacrifices to get it

Guaranteed inferior gains are valued over superior ones that have some risk. When faced with uncertain times, certainty is a feeling that we place a premium on.

Kahneman & Tversky (1981). The Framing of decisions and the psychology of choice. Science. 211 (4481): 453–458.

The study

Setup

Setup

77 people were asked to choose between an entirely certain win of $30 and an uncertain 80% chance of winning $45.

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Results

Results

78% of people opted for the significantly smaller, certain reward, despite the risk-adjusted payout being higher for the uncertain reward (0.8 * $45 = $36).

Study graph
np_read_2490885_000000

Kahneman & Tversky (1981). The Framing of decisions and the psychology of choice. Science. 211 (4481): 453–458.

Key Takeaways

1
1

Certainty is valued highly.

What ways can your business create reassurance or guarantees that make consumers feel safe?  How can you use exclusive certainty to reward and foster a sense of status with your brand?

Takeaway image
2
2

Stick to your promises!

Letting consumers down, even once, will trigger uncertainty in the quality perceptions of your brand. If making claims about being the best at something, don’t ever give consumers reason to question that and turn a selling point into an unsustainable headache.

Takeaway image
3
3

Reframe uncertain offers to appear certain.

The uncertain frame here requires consumers to calculate proportional savings, but the certain frame removes this by showing certainty of a zero-priced third lemon.

Takeaway image
4
4
Takeaway image
Takeaway image
np_read_2490885_000000
np_read_2490885_000000

In further detail

Takeaway image
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Certainty Effect

Certainty Effect

We crave clarity over chance and make costly sacrifices to get it

Guaranteed inferior gains are valued over superior ones that have some risk. When faced with uncertain times, certainty is a feeling that we place a premium on.

The study

Setup

77 people were asked to choose between an entirely certain win of $30 and an uncertain 80% chance of winning $45.

Results

78% of people opted for the significantly smaller, certain reward, despite the risk-adjusted payout being higher for the uncertain reward (0.8 * $45 = $36).

study graph
np_read_2490885_000000

In detail

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Nuggets

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Open access, foundational Nuggets

Scarcity

Scarcity

We value things more when they’re in limited supply

Social Proof

Social Proof

We copy the behaviors of others, especially in unfamiliar situations

Prospect Theory

Prospect Theory

A loss hurts more than an equal gain feels good

Reciprocity

Reciprocity

We’re hardwired to return kindness received

Framing

Framing

We make very different decisions based on how a fact is presented

Loss Aversion

Loss Aversion

We feel more negative when losing something than positive when we gain it

Self-Expression

Self-Expression

We constantly seek out ways to communicate our identity to others

Default Effect

Default Effect

We tend to accept the option pre-chosen for us

Priming

Priming

Our decisions are shaped by memories recalled from things just seen or heard

Anchoring

Anchoring

What we see first affects our judgement of everything thereafter

Autonomy Bias

Autonomy Bias

We have a deep-seated need to control our situations

Fast & Slow Thinking

Fast & Slow Thinking

We make knee-jerk spontaneous decisions that can cause regretful damage

Status Quo Bias

Status Quo Bias

We tend to stick with our previous choices, even if the alternatives might be better

Dynamic Norms

Dynamic Norms

We’re more likely to change if we can see a new behavior developing

Salience

Salience

Our choices are determined by the information we're shown

Connected to

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