Research shows that when we have to decide between two possible outcomes, one with a known probability and one with an unknown probability, we tend to choose the option with the known probability.
We skip over the difficult part of making estimates or guesses about the ambiguous option and opt instead for the familiar outcome.
The ambiguity effect influences our shopping habits. Research shows that people tend to choose products and services from well-known brands because they think that known brands have better quality products.
The buyer faces three potential consequences:
People have different tolerance levels for ambiguity - the tendency to view ambiguous circumstances as desirable.
Self-reflection can help you to see where you are on the spectrum of ambiguity. Think of a time when you had to decide with limited information. How did you address it? How did you feel while trying to make a choice? Which option did you choose?
If you have low levels of tolerance for ambiguity:
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