Ambiguity Effect

Explanations > Theories > Ambiguity Effect

Description | Example | So What? | See also | References 

Description

When people make choices, sometimes they have a good understanding of the probability of something happening whilst other times the situation is ambiguous, whereby the probability of the event is unknown. In such situations, people are more likely to choose the former situation, preferring a known probability over an unknown probability.

Taking a decision on something that may not happen is a risk. When the probability is unknown this can increase the sense of discomfort beyond even that of a known low probability.

Example

I know that there is at best a moderate chance of my winning a local singing competition as the local singers are good. There is a competition in the next town but I do not know how good the singers are there. Rather than 'risk it' I just enter for the local competition.

So What?

Using it

To get people to choose an option, ensure they have a view on how likely it is to succeed for them. To dissuade them from other options, show that little is known about the chances of success there.

Defending

Try assessing the probability range for ambiguous choices.

See also

Explanatory Coherence

References

Ellsberg (1961), Frisch and Baron (1988)