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.

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

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
Coglode Live

Coglode Live

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

Hungry for more?

Savour the full features of Coglode Cookbook

Upgrade

All Nuggets

Academic data

Key takeaways

Pairings

Cheat Sheets

Collect Nuggets

Nuggets In The Wild

Coglode Live monthly

Nuggets

Snack on these...

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

Default Effect

Default Effect

We tend to accept the option pre-chosen for us

Anchoring

Anchoring

What we see first affects our judgement of everything thereafter

Fast & Slow Thinking

Fast & Slow Thinking

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

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

Hungry for more?

Savour the full features of Coglode Cookbook

All Nuggets, data & takeaways

Academic data

Key takeaways

Pairings

Cheat Sheets

Collect Nuggets

Nuggets In The Wild

Monthly Coglode Live calls

Upgrade

Join Coglode Live!

March 29, 2023 16:00

GMT

Prospect Theory
A loss hurts more than an equal gain feels good

Prospect Theory's considered one of the most important (and confusing) concepts in Behavioural Science. We'll explore:

• The various mechanics of how it works

• Examples from the wild that use it well

• How you can use Prospect Theory in your work to improve experiences!

So join us. Tversky and Kahneman will be proud of you.

Show more
Prospect Theory
A loss hurts more than an equal gain feels good
Sign up to attend
© 2013-23 Coglode

Running workshops?

Certainty Effect

is included in Box One of our physical workshop tool.
is included in Box Two of our physical workshop tool.
Nuggets Boxes