The certainty effect is the psychological effect that results from reducing a probability from certain to merely probable, so that people weight a guaranteed outcome more heavily than the mathematics of expected value would justify. It is an idea introduced within prospect theory, the account of how people actually evaluate risky choices rather than how a purely rational decision-maker would evaluate them.
Facts
Core ClaimThe psychological effect resulting from the reduction of probability from certain to probable. 1 Classification
Type of Phenomenon Sources
1. Certainty effect, Wikipedia
Lead paragraphQuote, Lead paragraph
The certainty effect is the psychological effect resulting from the reduction of probability from certain to probable (Tversky & Kahneman 1986).
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