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

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

Key Takeaways

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

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

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
Takeaway image
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
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Risk Aversion
We don’t like uncertainty and generally stick to what we know

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We don’t like uncertainty and generally stick to what we know
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