The impact of the ambiguity effect

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:

• They choose a mediocre product where an unknown brand may have better quality.
• They lose money by spending it on more expensive brand-name products.
• They miss out on buying a product that will meet their needs.